Friday 18 October 2019

Purveyors of bad news are selling us down the river

The negativity of the 'doom and gloom' merchants threatens the economic recovery, writes Marc Coleman

Marc Coleman

THEIR dispatches are little more than dumbed-down diatribes. Their self-promotional tactics would make Jedward blush. And their forecasts of recession were made so often and early that, like a broken clock, they were bound to be right at least twice a day. Our politicians take them seriously, but that just goes to show how superficial they are.

Unfortunately, the dime-a-dozen divas of despair are also darlings of a media addicted to reporting the next apocalypse. A media that has completely missed the huge positive angle on our economy. That's because, to get the positive angle, you have to look back -- and forward -- over a longer period than two years.

Yes, the economy has shrunk by 10 per cent since 2007. But it grew by 413 per cent in the last four decades. Would it kill anyone to point out that a big step backwards has come after four equally big steps forward?

Or that, even if 100,000 emigrate, our population has grown by 300,000 in the last three years and by a million since 1996?

Or that, despite emigration, our strong rate of childbirth should ensure that any population shrinkage will be modest and short-lived, and that our population is still on target to grow to five million by 2020?

And that if we get our competitiveness house in order, we should be able to create enough jobs to bring the emigrants back by 2016?

The media thinks that bad news is the only news that sells. For personal and political news stories, it is probably right; but when a recession is on, it's a different ball game.

Sure, in a boom we need a bit of constructive negativity. In a bust, we need the opposite. Like the drone of vuvuzelas in the World Cup, it's time to bring an end to the drone of the divas of despair.

Having driven a nation to stash its cash under mattresses out of sheer terror, negative comment has pushed our savings ratio from a (too low) rate of four per cent to a (too high) rate of 10 per cent.

While job loss was inevitable in the recession, this means that tens of thousands of jobs more than was necessary were lost, hundreds of millions more tax revenues were wiped out and -- perhaps the most devastating indictment of the irresponsibility of the divas -- we are paying tens if not hundreds of millions more on our government debt interest than if commentary on the economy had been calm and measured. Thanks a lot, lads.

Like zoo cleaners looking after incontinent elephants, we now have to run behind these guys with a bucket and shovel. Recently I was appalled at some of the infantile comment on our downgrading by Moody's. In June, in Hamburg and Munich, our Ambassador to Germany, myself and a team from the German/Irish chamber of commerce were busy promoting Ireland's recovery -- and in September we go on to Berlin and Dresden.

Now the tide is turning. Our bond spreads are coming down, easing pressure on the Exchequer. But nerves still have to be steadied back home: bringing down our savings ratio a notch or two will be crucial to stabilise spending, jobs and taxes at this critical economic turning point.

If the divas even had a credible solution between them, they might at least be useful. But their ideas are either derivative or just plain stupid. Take leaving the euro, for example. There is a school of thought that Ireland is now a net contributor to the EU and that we are "subsidising farmers" in the former Eastern Bloc. Ireland will, in fact, remain a net beneficiary of the EU until 2013. And, even if we were at last giving after all we've taken from Europe, what would it say about us if we turned our backs on those who helped us at the very moment when it was our turn to give something back?

Revealingly, the divas apply the same selfishness and cynicism to their policy prescriptions as they do to their cynical interpretation of our economic narrative at our expense.

They are also clueless about economics: citing Uruguay and Argentina's devaluation of their currencies as a model for us to follow in leaving the euro ignores how those countries were able to use vast commodity exports to survive devaluation.

But our exports depend greatly on multinationals who were attracted here because of the euro. Leaving the euro would also beggar the Exchequer -- due to high interest rates -- within a matter of months, if not weeks.

In one TV programme on the housing market we were shown the scary sight of a row of boarded-up houses, allegedly representing the collapse of our housing market. The houses were, in fact, in Moyross and were boarded up because they were being evacuated for social reasons.

Another showed an empty hotel in Dublin's Grand Canal Dock -- surrounded by buildings that were full and thriving -- as if it was the first sign of nuclear winter. What wasn't shown was the empty wasteland of rats and rubble that the whole area constituted 20 years beforehand.

For every 10 buildings built since then, nine are busy and thriving. But only the negative 10 per cent gets noticed. It has to change.

Marc Coleman is Newstalk's economics editor and presents 'Coleman at Large', Tuesdays and Wednesdays, 10pm-midnight

Sunday Independent

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