As a reprise of their considerable study of the Irish media’s part in helping to pump up the Irish property bubble, The Media and the Banking Bailout, David Manning and Miriam Cotton of MediaBite have provided another analysis of how the mainstream media in Ireland is now, in the wake of the disaster that they were involved in orchestrating, pointedly promoting a ‘deflationary’ economic point of view.
The deflation that has occurred as part of the collapse of the property market must now, elements within the media seem to argue, take with it that part of the economy upon which most people in Ireland rely.
According to Vincent Browne the establishment of the National Asset Management Agency (NAMA) represents “potentially the single largest transfer of wealth ever to take place at once.” The agency, established to “oversee the transfer of the dodgy loans held by the banks, loans amounting to €90 billion,” will take on billions of Euro in debt owed by developers. With the taxpayer essentially becoming liable for the commercial risk now realised in the ghost estates mercilessly documented by Eamonn Crudden in his short film ‘Wallets Full of Blood: Houses On The Moon‘.
Properties sold as investment opportunities and, often secondarily, as ‘a place to call home’ will now not only become the crash landing of negative equity, but the burden of additional tax. Taxes that will not be spent on public services, but set aside for the state financed bailout of a rich minority.
As quoted in ‘Houses on the Moon’, “What was built to keep people safe, is gonna trap them inside.”
Scapegoat the poor
By establishing NAMA, the government identified the primary cause of our economic difficulties. Not public sector inefficiencies; not uncompetitive wages; not excessive social welfare payments; not even reliance on low corporate tax rates. But reckless lending, by reckless financial institutions, to reckless developers, spurred on by a reckless government and all under the watch of a reckless establishment press.
So how does this inconvenient fact fit into the recessionary narrative? Not very comfortably it would seem.
In the weeks and months since the banking crisis was exposed “the economic debate [has morphed] from an obsession with debts and deficits into a full-blown assault on the public realm that has more in common with Thatcherism than it does with mere fiscal prudence.”
For instance, The Irish Times’ Stephen Collins recently warned that “[t]ackling the public service pay bill and the social welfare bill can hardly be avoided.” Dan O’Brien of the Economist Intelligence Unit also told of the need to address “the elephant in the room” in the Irish public finances,” declaring that a “reduction in the minimum wage from €8.65 was “an open and shut case.” While Sarah Carey fretted about the potential impact of bank nationalisation, whereby the inefficiencies of the public sector might exacerbate the incompetence of the banking sector! “I accept that there are talented people in the public sector, but the inertia of government is more than they can usually bear. Worse, it’s contagious. Turn bank employees into public servants and I guarantee the malaise will seep in.”
A sentiment summed up in ‘Shock Doctrine-esque‘ clarity by an Irish Times’ Editorial writer: “Serious reform of the public sector – too long shirked by all political parties – was never more necessary. An economy in crisis presents a political opportunity to achieve that reform.”
Read the rest of part one of this article on MediaBite.
Also, here’s part 2 of the article in which they provide the point of view of those inside the media who have responded to the criticisms they have raised over the last year.
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