Favouring the Rich – A Media Prerogative?

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[The ruling class has constructed] two parallel universes, one in which there seems to be an endless amount of money that can be put into the banking system and another where we have to attack the blind, the disabled, children and the unemployed. It’s remarkable how successful this crude strategy of distracting and dividing people has been.” Fintan O’Toole, Tonight with Vincent Browne

The media response to the last week’s ‘cowardly‘ ‘budget from Hell‘ has been suitably contradictory and best summed up by the Sunday Independent Editorial writer who described it as ‘courageous masochism‘. While commentators are for the most part agreed that the budget, which focused almost entirely on cutting public sector spending, specifically spending on social welfare and public servant pay, was ‘tough medicine‘, the overriding sentiment is one of satisfaction.

Noel Whelan writing in the Irish Times praised the Taoiseach, “for carrying his Cabinet, his party and his Dáil majority through for these necessary draconian measures.” Stephen Collins gave tribute “to the skill with which the public was softened up for the measure and the way it was packaged and delivered.” The Editor summed up the official line on the “harshest budget in the history of the State,” describing it as “courageous, bold, above party politics, above sectional interest and appears to have put the country first.

The Independent too, while not as openly celebratory, editorialised their feelings under the headline ‘Cowen finally walks the walk’, writing, “despite being probably the most unpopular [leader] in the history of the state, [he] is managing to get a lot done,” with only one small reservation: “This week’s strong start could be undermined by any weakening of resolve.”

The Irish Examiner’s Jim Power on the other hand had little time to celebrate the forgone conclusion, being too busy looking forward to the next round of cuts: “Despite the harsh nature of the budget, there is still a lot of pain to come…Some measures to stimulate employment would have been welcome, but we can’t have everything.”

A convergence of opinion Garret FitzGerald was surprisingly oblivious to. Writing in the Irish Times the former Fine Gael Taoiseach protested, “no one is actively celebrating the achievement of a further €4 billion fiscal adjustment.” The reader taking for granted he had accidentally omitted the word ‘fantastic’.

In light of the comment above by Fintan O’Toole, author of the much revered ‘Ship of Fools’ and, some might say conflictingly, Assistant Editor of the Irish Times, it may be instructive to look back at the media’s build up coverage to the budget in order to discover whether the media played a role in affirming the ruling class’s “crude strategy of distracting and dividing people.”

There are two prominent features of the reporting in the two weeks leading up to the budget, the first of which is that the nature of the budget had been apparently predetermined, as Jim Power’s comments highlight. The cut of €4 billion was a forgone conclusion and the areas where those billions were to be ‘saved‘ lay in public service pay and social welfare, the ‘big targets‘ according to the Independent. The Government, readers were told, could not “afford to undershoot the €4 billion target.”

The second is that the media were fiercely supportive of the cuts and this support manifested itself in strongly worded calls for Brian Cowen and the political establishment to ‘walk the walk’. The budget provided an opportunity for “clear leadership and good example,” a chance “to resist pressure from vested interests” and “a time for the Government to lead public opinion in the national interest.” “The media,” according to Matt Cooper writing in the Irish Examiner, did “not want to see him fail.”

Other journalists went further still, declaring a state of war: “Decks cleared for budget,” with calls for the Taoiseach to “stick to his guns” and “face down unions” at a “career-defining line in the sand.

The symptoms of this perceived lack of political manliness were also made abundantly clear, “tax increases are the last resort of weak government;” “the easy option” according to the Irish Times. While the “weakness and indecision” in entering talks with the unions hinted he had “appeared to lose his nerve,” raising “question marks about his continued leadership.” Their eventual collapse saved him from “a political disaster.”

This flirtation with union negotiation, which according to Stephen Collins “exasperated even some of his most loyal supporters,” gave rise to a popular euphemism among journalists, again intended to question the leaders courage, or perhaps his sweet tooth: “There may have been no fudge but some of his colleagues certainly believed they were looking at the beginnings of one;” “Government sources made it clear there was no similar fudge in the offing to avert cuts in child benefit or social welfare rates;” “a fudge could not be ruled out.” As the talk’s ultimately ended in failure, the insult became a warning, “let’s not fudge it next week,” “there is no longer room for mere fudge.”

Of course Cowen did rise to the challenge, implementing the desired cuts and declaring “war on the poor” according to Fintan O’Toole – writing in the Irish Times in one of a small minority of examples of dissenting journalism. Upon fulfilling this call for ‘leadership’ with the ‘draconian’ budget Cowen and his Minister for Finance Brian Lenihan were appropriately rewarded for their “intellectual rigour” and “political determination and courage” in facing “down the trade unions.” The budget was hailed as their “watershed moment,” though one journalist lamented that “the compliments of future historians for addressing the economic crisis will be of little comfort.”

As mentioned above, the nature of the budget had been predetermined long before the details of “one of the most leaked budgets in history” made it into the newspapers. In the weeks ahead of the budget journalists’ time was dominated by search for new and inventive ways to cut towards the magic €4 billion target. As the Irish Times‘ Pat McArdle put it, “it is always tempting to play God and outline one’s personal budget.” A temptation he fulfilled seven days later: “What savings can we expect from falling staff numbers over the medium term? What is the minimum size of the public sector required to run the country? Will a property tax be necessary? Will further pay or social welfare cuts be required? Will capital spending have to be eliminated completely?”

Writing in the Irish Times John O’Hagan reiterated the “widespread agreement among independent commentators” that the case for cutting the “over paid and inefficient” public sector was “almost unanswerable.” Epitomising the success of what Gene Kerrigan called the government’s “media team-players” who never fail to depict “the public service as a “bloated” entity, overpaid and lazy.”

An Irish Times Editorial writer declared, “People want the Government to…introduce a budget next week with €4 billion in savings so that we can start believing in ourselves again,” while also intimating that anyone who disagrees doesn’t “live in the real world.” There was, we were consistently assured, “general agreement that a €4 billion package is needed.”

Yet an Irish Times/Behaviour Attitudes poll published less than two weeks before the budget found that “more than two-thirds of those surveyed were opposed to welfare cuts, while some 56 per cent said they oppose [public sector] pay cuts.” Clearly then, a general agreement had been made without the consent of the Irish public, a general agreement of the ruling class perhaps.

Alternative budgetary proposals, such as that designed to engender a stimulus plan were for the most part ignored or treated as an after thought. Where this infrequent consideration did arise, it was more than often mentioned in parting, at the end of articles. Even then, the stimulus plans offered were rudimentary at best. One journalist suggested “The car scrappage scheme as an obvious one,” a measure that was in fact introduced to little fanfare: it will be short term, but may help some businesses survive.Anything more significant than this was regarded as impossible since our fiscal position inhibits our capacity to introduce a major stimulus programme.”

Proposals to increase tax where shot down by the likes of Danny McCoy, who insisted that “OECD data show that effective tax rates for high-income earners in Ireland are higher than those in many European countries, including Germany, France and the UK.” A claim which confounded the ‘discovery’ by another journalist “that many lower-income earners pay either no or very little income tax.”

The claim was disputed by Fintan O’Toole in the Irish Times, importantly, five days after the budget: “According to accountants KPMG, the current effective tax rate (including PRSI) for someone earning the equivalent of $100,000 in Ireland is just 34 per cent and for someone on $300,000 it is 44 per cent.” While “unit labour costs (the ratio between productivity and earnings) hardly rose at all in Irish manufacturing between 2000 and 2007. The growth in labour costs last year was slower than the average in the euro zone. This year, unit labour costs are expected to fall by 7 per cent here and rise by 3 per cent in the rest of the euro zone – giving us a relative advantage of 10 per cent this year alone.”

Instead, the debate was as mentioned earlier entirely skewed towards cuts, aimed at increasing ‘competitiveness’ by driving down wages. The assumption being that Irish workers are paid too highly and that “we now need to get back in line, particularly with economies in Europe.” An assumption that is not supported by reputable sources, unquoted in the media. Destatis, the German equivalent of the CSO, found that for all manufacturing employees the “average Irish manufacturing wages are 2.3 percent below the EU-15 average and 17 percent below the average in our peer group (top-10 EU economies).”

During a post budget exchange between Vincent Browne and Fintan O’Toole during Tonight with Vincent Browne, O’Toole described what he saw as a complete failure in responsibility on the part of the media, saying that the media bought into an analysis which says ‘there is no alternative’ (a favoured slogan of former British Conservative Prime Minister Margaret Thatcher). He gave the example of a recent ESRI report on subsidies for Irish pensions, which indicated that the introduction of pension relief at a standard rate could bring in a billion Euros, yet there was not a single piece of discussion of this in the Irish media.

Browne asked in response: “Why did that not get headlines in the Irish Times?”

To which O’Toole limply explained: “I think it is because the narrative has been shaped around the fact we are vastly over taxed, which is completely untrue and that wages are far too high, which is also completely untrue. Anything that doesn’t fit into that narrative doesn’t strike people as being news.”

The great irony about this clamour to find ‘savings’, to cut public expenditure and to increase the burden on the poor, is NAMA, the National Asset Management Agency. Set up to take property development-related loans (amounting to an estimated €54 billion) off banks’ balance sheets, NAMA, as one commentator put it, is designed to “overpay for dud assets” in an effort to “prop up insolvent private banks.”

Yet in the 10 days leading up to the Dail vote on the legislation, the media build-up was what you might call mute. Of the dozen or so opinion and analysis articles published between the Irish Examiner, the Irish Independent and the Irish Times, the strongest worded criticism was, “the banks’ fetid loan books” have the “potential to wreck us all.” Somewhat predictably this criticism came only in the context that the public finances have just as much ‘potential’.

Writing on the Anglo Irish fiasco in the Irish Examiner Ivan Yates admitted, “The taxpayer is likely to have to fork out up to €10bn to clear up the mess. NAMA is scheduled to take €28bn of their €70bn loan book.” Plainly, Yates had summed up the massive economic burden one relatively small business venture had condemned the Irish public to bear. Yet in a deftly designed about turn, Yates declared, we “must move on from the blame game and convulsions of public anger” and act to rebuild what his colleague called “this bruised, misused and ransomed country” by “confronting the unsustainability of our public finances and restore economic competitiveness.”

Yates’ position typifies the general media consensus on the economic crisis. While it is widely recognised that a rich elite caused the downturn, the general public should ultimately pay for the recovery.

So where the banking bailout is concerned, there are no calls for ‘leadership in the national interest’, no calls for a ‘war on corrupt financial institutions’, no calls for the slashing the pay of all the ‘greedy, incompetent bankers’ and most importantly no calls ‘to resist pressure from vested interests’.

This “complete failure in responsibility on the part of the media,” paired with the media’s central role in cheerleading the property bubble makes increasing clear that Noam Chomsky’s observation on the role of the US media is just as applicable to Ireland:

“The U.S. mass media, far from performing an autonomous and adversarial role in U.S. society, actively frame issues and promote news stories that serve the needs and concerns of the elite.”

 

6 Responses

  1. Ronan L

    December 17, 2009 12:17 pm

    I don’t this article is without merit – for example, great to see admission that the average worker is undertaxed. However, it conveniently ignores a few facts:
    – Ireland’s government/GNP ratio is going to be the largest in the EU this year; I challenge anyone to argue we have the best public services
    – I may not like it either, but borrowing for one-off capital purposes (i.e. for Anglo) is a lot easier than borrowing to pay wages
    – (apologies for repeating myself from an earlier comment on this site) the size of the deficit is large enough that we have to introduce all sorts of tax rises and spending cuts over the coming 5-10 years; what you’re really arguing about here is the order. You wanted these cuts made next year not this.

  2. A.Hall

    December 17, 2009 3:49 pm

    Ronan, do you really believe Anglo Irish is worth saving? That it’s worth the money the Irish people are being forced to pump into it?

    Not much of an economist, are you?

  3. Proposition Joe

    December 18, 2009 2:27 pm

    The reader taking for granted he had accidentally omitted the word ‘fantastic’.

    That’s very unfair on Dr. Fitzgerald.

    Not that his advocacy has had much impact, but he’s been very consistent on two points:

    1. The wealthy in Ireland are under-taxed, and the ordinary worker is even more under-taxed. Both are going to have to move closer to the European average tax burden.

    2. The original plan for the 2010 budget envisaged more of a balance between tax rises and spending cuts (a circa 40:60 split). Why this plan was unceremoniously dropped has never been adequately explained and should have been properly debated. Garret clearly favours using tax rises to mitigate the cuts, especially to welfare.

  4. henry

    December 19, 2009 3:50 pm

    you are all still well within the media agenda, that is when taxation is discussed its only taxation on wages, whether high or low. The real issue is the lack of taxation on capital.