Why is Michael Noonan courting property developers and vulture fund managers?
Has he learned nothing?
Julien Mercille write:
Our Minister of Finance, Michael Noonan, is cosying up again to the same developers and banks who crashed the country. A few days ago he met with them to explore ways of financing new construction.
Celtic Tiger developers Johnny Ronan and Michael O’Flynn and others were present at the “low-key”, “behind-closed-doors” meeting in the luxury Marker Hotel in Dublin’s Dockland. They said it’s “good to see” the key players in construction in the “same room again”.
The Irish Independent conveyed Noonan’s thoughts without challenge with the headline “It’s Time for us to Stop Scapegoating Property Developers—Noonan”. A tough press challenging the government indeed.
The Sunday Times went further and backed the strategy while defending the developers. The editors were explicit: “It’s Time to Bring Developers in from the Cold”, they said. They stated that Noonan’s comments about scapegoating were “right on the money”. Then followed a pathetic defense of those directly responsible for the crisis as the editors asserted that:
-Since the crash, “much time and energy has been expended in scapegoating” bankers, developers and politicians, which is harsh because “most of the culprits have been punished in one way or another”.
-And “if we keep obsessing about the mistakes and injustices of the past we are in danger of losing the capacity to move forward”, and that’s why “Noonan’s comments make perfect sense”.
-If we don’t bring developers back, we won’t be able to build the houses we need because those developers “have experience of dealing with the myriad issues involved in turning an empty field into family homes”.
-We shouldn’t forget that the only thing most developers did “was borrow too much money from banks”, something we all did anyway because we were all partying.
Oh wow. Reality turned on its head.
In fact, bankers and developers haven’t been scapegoated at all, otherwise they’d be in jail or would have been forced to do community work for years to compensate for the mess they’ve caused. Second, if we forget about the mistakes of the past, well, we’ll make them again.
Third, the way to build the social housing units needed is to involve the government more in this task, not discredited developers. Rory Hearne provides a lot of progressive ways on how this could be done here.
Last, we didn’t all party. The truth is that a small minority of VIP’s partied, and everybody else then cleaned up their mess.
Indeed, good reporting from yesterday’s Sunday Business Post revealed that in 2008, a mere 22 Celtic Tiger developers were responsible for a staggering €26 billion of debts to banks. Compare that to the €64 billion that taxpayers injected in banks to recapitalize them.
Michael O’Flynn had total borrowings of €1.8 billion primarily owed to Anglo Irish. Johnny Ronan was one of the “most ambitious developers of the boom” and owed €1.6 billion mostly to Anglo Irish. Denis O’Brien owed €1 billion primarily to Anglo Irish. Bernard McNamara owed €1.7 billion, mostly to Anglo Irish. Sean Quinn owed €2.9 billion, almost all of it, you guessed it, to Anglo Irish.
But Noonan has been meeting up with other characters as well: foreign vulture funds, many from the United States, that have been buying up Irish property by the ton.
Again, the Sunday Business Post has done very good reporting on this, with journalists Ian Kehoe, Emma Kennedy and Roisin Burke in particular spelling it out as it should be in articles entitled “Who Owns Ireland and Who Wants to Buy it”, “Vulture Funds Turn Screw on Apartment Renters” and “Why Vulnerable Mortgage Holders Are in the Line of Fire”.
They show how foreign interests are capturing large chunks of the country’s stock of property, and warn that they are most likely to leave in the short term, once the assets have gone up in value, at which point they’ll sell them back to… Irish people.
This highlights an important point about the mass media. Of course, there’s a lot of regurgitation of government propaganda.
You can find that in editorials, opinion and news sections. Uncritical reporting is definitely one way to make a long and rewarding career in Irish journalism. If you establish good contacts with influential politicians and report descriptively on whatever they say with no questions asked, you’ll get a secure job. If you defend them when they’re attacked, you’ll be praised beyond retirement.
But there’s also excellent information in the press. The reason is that the business press caters to, well, business people, and decision makers. Those people need good information, otherwise it would be hard for them to make any decisions. So there is good analysis in the business press, albeit presented from the point of view of someone in business. It’s also often buried in the back pages, but it’s there.
@JulienMercille is lecturer at UCD and the author of The Political Economy and Media Coverage of the European Economic Crisis: The Case of Ireland. He will provide evidence to the Banking Inquiry later this month on the role of the media during the housing bubble years.