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Extract: The role of the media in the Irish economic crisis

Some commentators have noted that Irish news organisations failed to give proper warnings of the impending crash. But why?

Julien Mercille

THERE HAS BEEN little research investigating the media’s role in the current economic crisis, in Ireland or elsewhere. In the United States, one empirical study found that in the years prior to the crisis, the American media could be described as ‘the watchdog that didn’t bark’ since ‘the business press institutionally lost whatever taste it had for head-on investigations of core practices of powerful institutions’.

Similar conclusions apply to the performance of British journalism. Other studies have examined aspects of media coverage of the crisis in Argentina, Switzerland, Germany and Spain. In Ireland, some commentators have noted that news organisations failed to give proper warnings of the impending crash.

This literature leaves many gaps in our understanding of the media’s role during the economic crisis and in the years leading up to it. In particular, with a few exceptions, existing research does not examine news organisations within a critical political economic framework. Indeed, explanations for poor media performance have centred around journalists’ ‘herd mentality’ and hubris and the time pressures preventing them from pursuing in-depth investigative stories, combined with reporters’ lack of training in finance. Other studies have described the metaphors and language used by the media to describe the crisis but neglected to examine the political economic system of which the media are part and parcel.

I argue that news organisations convey the views of political and economic elites. It is true that there are many debates taking place in current affairs reporting, but they are confined to the relatively narrow range of opinions within the establishment.

The following key points draw on the work of a number of theorists:

1. Corporate and governmental links

Both private and state-owned media organisations largely convey corporate and political establishment views, but for somewhat different reasons.

Private media organisations are large corporations embedded in a capitalist economic system and are thus integral parts of the broader corporate sector. This has several consequences. First, in order to start and successfully run a media company with any substantial outreach, significant financial investments are necessary, which means that only wealthy individuals and corporations are able to do so. Ireland’s media landscape is dominated by a relatively small number of conglomerates, reducing the diversity of views presented to its citizens.

Second, media firms are integrated into the market and feel the pressures of bankers, shareholders and directors to generate profits. Links with the broader corporate sector and political elites are created and maintained through boards of directors as well as general business and social interactions. For example, media organisations are in close contact with bankers for lines of credit, loans, receiving service and advice on the issuance and sale of shares and bonds, in addition to mergers, acquisitions and threats of takeover by other investors. Banks themselves, along with a range of other institutional investors, are also often large owners of shares in media companies. Such investors want profits and act as a constant pressure on media corporations to prioritise the bottom line.

Media diversification has also increased the integration of news organisations into the broader corporate world. Newspapers and television stations have acquired a range of other media and non-media businesses while non-media businesses have acquired interests in media organisations. In short, media firms have very similar interests to the corporate sector of which they are key entities, and thus the stories they present tend to reflect such interests and viewpoints.

Third, the media also have a close relationship with the government, which is able to some extent to pressurise them to conform to its viewpoints. This is because news corporations depend on the state for licences and franchises. Thus, the government is in a position to exert some leverage over the orientation taken by the media in their news coverage. However, it is also because the media, as any other business, depend on the state to maintain a healthy business climate favourable to private enterprise, at home and abroad if they wish to expand internationally.

2. Advertising

Advertising revenues are crucial to today’s news industry. They allow newspapers to be sold for a cheaper price, thus making them more competitive. Media unable to attract ads are at a serious disadvantage in the market and run the risk of bankruptcy. This affects news content because corporate advertisers tend not to subsidise television programmes or news stories that seriously question or attack their own business or the political economic system of which they are part, which would be directly contrary to their interests. For example, oil companies are unlikely to sponsor a news outlet filled with stories about environmental degradation and climate change caused by car driving. Sometimes news organisations can lose advertising funding if they are too critical, as when Gulf + Western cut its corporate funding to public television station WNET in the United States after the station showed a documentary with material critical of multinational corporate activities in developing countries. The CEO of Gulf + Western told the station that the programme was ‘virulently anti-business if not anti-American’.

One particularly clear example of the significance of advertising to the Irish media is the large amount of funding from property advertising received during the housing boom years. For example, most newspapers published weekly supplements for commercial and residential property, ‘glamorising the whole sector’, while ‘Glowing editorial pieces about a new housing estate were often miraculously accompanied by a large advertisement plugging the same estate’, in the words of Shane Ross, former Sunday Independent business editor. Ross also shows the power of advertisers in influencing news content when he states that ‘unfavourable coverage of developers and auctioneers in other parts of the newspapers was regularly met by implied threats from property interests that advertising could go elsewhere’.

Moreover, a reporter working for an Irish news organisation stated that journalists ‘were leaned on by their organisations not to talk down the banks [and the] property market because those organisations have a heavy reliance on property advertising’. As Irish Times columnist Fintan O’Toole remarked, ‘There is no question that almost all of the Irish media for the last 10–15 years has had a crucial economic stake in a rising property market. Because property advertising is very lucrative and is a very important part of what makes the Irish media tick’.

3. Sourcing

Journalists depend mostly on mainstream institutions for their reports. Because of limited resources, time constraints and a competitive news environment, reporters need to connect with those institutions that provide a steady flow of news, which in practice means large organisations that have themselves the resources to produce and release such a stream of material. The government and corporations are two such sources, with the result that their points of view are predominant in the media. Also, sourcing stories to those organisations confers an image of objectivity and credibility.

Moreover, conveying the government’s and corporations’ views offers some protection to the media against potential libel suits, which would be more numerous if stories were critical and challenged mainstream thinking. One result of the sourcing relationship between journalists and powerful institutions is that close relationships develop between reporters and members of the corporate sector and government. The latter can then deny privileged information to journalists who do not adopt the expected storylines, as happened during the housing bubble in Ireland.

Indeed, there are many examples illustrating the above claims in the Irish context, as revealed by a study based on interviews with Irish financial journalists. One said that because of the need for regular contact and interaction with financial sources, ‘some journalists are reluctant to be critical of companies because they fear they will not get information or access in the future’. Another business journalist related how ‘many developers and bankers limited access to such an extent that it became seen to be better to write soft stories about them than to lose access. Extremely soft stories would be run to gain access’ to them as well.

Threats of legal action limit the possibility of undertaking investigative financial reporting because banks and real estate companies can easily drag news organisations into expensive legal procedures, so that ‘very often a threat of an injunction is enough to have a story pulled’, while many legal actions by powerful individuals or corporations are ‘executed purely to stifle genuine inquiry’. One journalist even mentioned that reporters face much pressure from the industry to influence news content, and that it is ‘well known that some PR [public relations] companies try to bully journalists by cutting off access or excluding journalists from briefings’.

4. Neoliberal ideology

Since the 1970s, the neoliberal project has necessitated a certain level of popular consent in order to establish itself in various countries in the world, let alone to permit its proponents to win elections. Dominant ideological and cultural forces constitute a form of hegemony in Gramsci’s sense, that is, such forces induce popular consent to the rule of elites in society. Civil society institutions play an important role in establishing this hegemony, including the education system, the Church and the media.

In this respect, some have noted the rise of ‘neoliberal newspeak’ in news organisations and intellectual circles, which, through ‘perpetual media repetition has gradually transformed into a universal common sense’ key neoliberal notions and values, such as the efficiency of the free market and individual responsibility. Simply put, because the media reflect the views of the corporate world, and that the latter has been transformed along neoliberal lines in recent decades, it is no surprise that news organisations are imbued with a neoliberal ideology which permeates the stories they present. In Ireland, it has been shown in detail how a ‘Celtic Tiger discourse’ has been used by policy makers at home and on the international stage in order to present a convincing programme of economic, political and social development. Although Irish governments have never explicitly adopted a neoliberal ideology, neoliberalism has nevertheless permeated much of policy making and even popular understandings of economy and society.

Some have maintained that the Celtic Tiger years were bound up with a cultural discourse of entrepreneurship and individualism ‘both as personal attributes to be cultivated by the individual (and which educational institutions are expected to play a central role in facilitating) and as dominant social values’. It has also been noted that those ‘dominant meanings are constructed to legitimise power hierarchies’. Peadar Kirby describes a ‘new class of wealthy and powerful entrepreneurs’ in Ireland, whose values ‘have become the values of neo-liberal Ireland, and enterprise culture made up of attitudes, values and norms which serve the needs of the market and which are actively promoted by government agencies’.

Of course, the crisis has led to a questioning of such values by a range of groups and grass-root organisations which work toward a more egalitarian and progressive society. However, Kieran Allen and Brian O’Boyle have argued that the celebration of neoliberal values during the Celtic Tiger years was so extensive in Irish society that it partly accounts for the relative lack of protest in Ireland compared to other European countries since 2008. When the crisis struck, their argument goes, Irish people had been left somewhat unaware of economic alternatives, which impeded popular resistance to Troika (IMF, ECB and European Commission) prescriptions.

On the other hand, elites, including the media, have sought to reassert neoliberal values in their response to the economic turbulence, using discourses which foreground the need to ‘tighten our belts’, increase ‘civic discipline’ and raise competitiveness both domestically and globally.

This is an edited extract of The Political Economy and Media Coverage of the Irish Economic Crisis: The case of Ireland by Julien Mercille, published by Routledge.  Julien Mercille is a lecturer at UCD. Follow him on Twitter at @JulienMercille

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