Market Manipulation? Applying the Propaganda Model to Financial Media Reporting

Abstract

Herman and Chomskys Propaganda Model (PM) has emphasized how the various filters can lead to news reports misrepresenting the vested political and economic interests that underpin US foreign policy. However, there has been relatively little attention paid to the implications of the PM for media operations in another key dimension of capitalism: financial markets. Traders require timely and accurate information about changing market conditions. However, financial news announcements influence investor perceptions and sometimes trigger trading activity that reflexively changes the market conditions being reported. The interdependency of financial reporters, traders and analysts means that financial news production cannot be adequately understood in terms of how the PM filters distort media representations of markets. This article aims to critically analyse how financial news/information does not merely represent financial reality but reflexively constitutes it. The analysis will also highlight which aspects of financial news production are consistent with the PM as well as those that contradict it.