The Model Is Still Applicable

Herman also argues the availability of this model as a whole in post-Cold War days. “The propaganda model remains a very workable framework for analysing and understanding the mainstream media – perhaps even more so than 1988” (2003: 13). According to him, the political and economic change and the rise of communication industries after nineties devote to increase the applicability of this model.

One reason for him to insist this is because of the increase of the importance of ownership and advertising. Herman points out the elements which show the significance of the model such as the decline of public broadcasting, the increase in corporate power, globalisation, centralisation of the media organisations through merger and acquisition, the rise of competition for advertisers, and being incorporated with budget cuts. Besides, the growth of the public relations industry contributes to journalists’ dependent on sources and causing flak in a systematic way.

Herman continues “The fifth filter –anticommunist ideology—is possibly weakened by the collapse of the Soviet Union and global socialism, but this is easily offset by the greater ideological force of the belief in the ‘miracle of the market (Reagan)’” (2003: 11). Instead of anti-communism, he discusses the adherence of market economy as an ideology.

Criticism

There are mainly three types of criticism on this model. One is about the lack of study on the effects. The media has an influential power in society, however “the PM [propaganda model] takes for granted that media content serves political ends in myriad ways, but does not study these effects directly” (Klaehn 2002:153). About this, Herman argues “the propaganda model is about how the media work, not how effective they are” (2003: 8).

The second criticism is to regard this as a conspiracy theory. However, Herman and Chomsky clearly deny this point with saying “We do not use any kind of ‘conspiracy’ hypothesis to explain mass-media performance”. They emphasise their approach is close to “a ‘free market’ analysis, with the results largely an outcome of the workings of market forces” (1988: xii).

The third criticism is that this model fails to take in consideration about journalists’ professionalism and objectivity rules. Herman analyses this point as “professionalism and objectivity rules are fuzzy and flexible concepts” and professionalism does not mean to be “an antagonistic movement” against the ownerships of the media (2003: 6).

Chapter 3

BACKGROUNDS

As discussed in the previous sections, journalism has a risk to suffer from pressure of its ownership, advertisers, and sources. This section will present the actual examples of the problematic aspects of business/financial journalism. The Enron and other similar business scandals show how difficult the business/financial journalists could detect the truth. In addition, business/financial journalism has a risk to commit a crime like the insider dealing, because it can obtain the unreleased information earlier than the public. The Mirror (the United Kingdom) and Nikkei (Japan) actually faced with this problem. To regulate themselves, the Press Complaints Commission (PCC) sets the Codes of Conduct. This insists the importance of the morality and self-regulation, and shows the potentials for the media to be tempted in many ways.

The Frauds

Enron

Enron had been the one of the largest natural gas and electric marketer company. It was reported that the annual revenue were more than $ 150 billion. However, Enron actually had overstated its revenues and assets while Fortune chose it as the one of the “100 Best Companies to Work for in America”, and number seven on the Fortune 500(Longman 2002, Vasilescu and Russello 2005). Almost all the business/financial journalism had only played just a part of the bubble, and contributed to many people to be deceived without detecting the fraud (PS Burton 2002, Uskali 2005).

What Enron had done was self-dealing, “acting on both sides of the deal” (Deakin and Konzelmann 2003: 9). It had also involved mark-to-market accounting.

“Enron abused mark-to-market accounting to a staggering degree applying it in ways never intended, such as marking assets to the value of spreadsheet projections (“mark-to-model”) and to prices set by Enron itself in markets where Enron was effectively the market-maker (“mark-to-my value”)” (Stewart 2006: 116).

How was the way of reports in business/financial journalism? For example, The Wall Street Journal has reported Enron frequently. The following table shows the number of headlines about Enron in The Wall Street Journal since 1997. This data is the result of its advanced research on the website. The number of 2006 is the data from 1 January to 30 August except the headlines of law weblog.

(Source: The Wall Street Journal Online)

Until the time when the wrong doing was revealed, most of the articles failed to detect except the article on 17 October 2001, which wrote about Andrew Fastow, the chief financial officer at that time “entered into the unusual arrangement with his employer” and “It isn’t clear from Enron filings with the Securities and Exchange Commission what Enron received in return for providing these assets and shares”[2]. The time this article was written was right after the announcement of the third quarter loss. The Wall Street Journal reported Enron’s $1.01 billion charge connected with write-downs of investments, and warned “the risks the onetime highflier has taken in transforming itself from a pipeline company into a behemoth that trades everything from electricity to weather futures”. After this, many rating companies like Moody’s Investor Service downgraded Enron’s long-term debt. The value of Enron’s stock sharply declined, and on 2 December 2001, Enron declared bankruptcy.

According to Carson, “executives could conceivably have believed that the sort of fraud and deception they practiced promoted the interests of shareholders” (2003: 392). Enron had especially focused on earnings per share (EPS). Stewart introduces the message from the former Enron chairman Ken Lay and the former Chief Executive Officer Jeff Skilling in the letter to shareholders as “Enron is laser-focused on EPS, and we expect to continue strong earnings performance” (2006: 116). They had been feeling the pressure from shareholders who had required a much higher return to ensure the compensation for their investment.

Дата добавления: 2015-11-14