Julien Mercille - Village Magazine

44 April 2015

D

R Julien Mercille is a lecturer

in geography with the School

of Geography, Planning and

Environmental Policy in

UCD, working on US foreign

policy, political economy and the eco-

nomic crisis. He appeared before the

Oireachtas committee of inquiry into

the banking crisis inquiry during its

module on media coverage of the prop-

erty bubble.

Mercille’s critique of Irish prop-

erty coverage is summed up best in the

following two paragraphs from his Oire-

achtas appearance:

“There are two main measures to

determine whether property prices are

in bubble territory: the price-to-earn-

ings ratio and the price-to-income ratio.

The Economist m ag a zi ne used t hose indi-

cators to warn about property bubbles

around the world early on. In 2002, it

stated that the Irish housing market had

been ‘displaying bubble-like symptoms

in recent years’, and, in 2003, it calcu-

lated that Ireland’s property market was

overvalued by 42% relative to the aver-

age of the previous three decades.

In Ireland, the economists David

McWilliams and Morgan Kelly identi-

ﬁed the problem and warned about it

early on.

However, overwhelmingly, the Irish

analysts and institutions, including the

media, maintained that there was no

bubble and that the boom would even-

tually end in a soft landing. Indeed, there

is a clear discrepancy between coverage

of the housing bubble before and after it

burst. Before 2008, the media tended to

largely ignore it, and it was only months

after it started deﬂating that reality had

to be faced. Once the housing market

collapsed, the media simply could not

ignore its downwards trajectory, hence

the increased coverage. I have included

two ﬁgures showing the number of arti-

cles on the housing bubble that appeared

in newspapers by year. On average, the

Irish Times had 5.5 times more articles

on the bubble per year in 2008–11 than

in 1996–2007.

Similarly, the Irish Independent and

the Sunday Independent had on aver-

age 12.5 times more such articles in

2008–11 than in 1999–2007.

Moreover, the few articles

published during the ear-

lier period often denied

that there was a bubble.

For example, there were

articles in the Irish Times

entitled ‘Study refutes

any house price ‘bubble’’

and ‘House prices ‘set

for soft landing’,’ while

the Irish Independent

and Sunday Independent

had headlines such as ‘NCB

rejects house value threat from

burst bubble,’ ‘House prices not about

to fall soon, insist auctioneers,’ ‘Price

of houses ‘not over-valued’ says new

report,’ and ‘There is no property bubble

to burst, despite doomsayers.’ In partic-

ular, between 2000 and 2007, the Irish

Times published more than 40,000 arti-

cles about the economy, but only 78 of

MEDIA Julien Mercille

Interviewed by Gerard Cunningham

Julien Mercille

Julien Mercille

MEDIA

INTERVIEW