Wednesday, November 04, 2015

The Corporate University: Payday Lenders Buy "Research" from Professors


When you're the only one with money, everyone else is for sale (source)

by Gaius Publius

Though I haven't written much about this topic, the merger of corporations and universities, it's been on my mind a lot. You see it in the way the CEO class and university presidents tend to think like each other, mimic each other's preferences, serve each other's interests — and sometimes be each other — as they move from one wealth-serving job to another.

You see it in the way that MIT's current president, for example, uses the power of his position to protect the wealth of the fossil fuel companies (my emphasis):
The Massachusetts Institute of Technology will not shed its investments in fossil fuel companies despite calls from some students, faculty, and activists, the college said Wednesday in announcing a five-year campus blueprint to confront climate change.

President L. Rafael Reif, in a phone call with reporters, said the university has determined that maintaining ties with oil and energy companies is a more effective way to tackle the problem. ...

The five-year plan calls for more research and education about climate change and solutions to mitigate and adapt to it; acceleration of low-carbon energy technology via eight new research centers; new tools to share climate information globally; and new measures to reduce carbon use on campus.

The plan mentions several major oil and gas companies whose chief executives recently expressed support for combating climate change, six of whom fund energy research at MIT: BP, Eni, Saudi Aramco, Shell, Statoil, and Total. ...
Wonder what his next job will be? I doubt you find him in a soup kitchen ladling oats to the homeless. In a few years, I'll bet he shows up on "Thank You Street" instead and pretty well set up.

The corporate university. This is not your daddy's alma mater. That alma mater has been acquired and "repurposed." Which leads me to this.

They're Not Just Buying Universities; They're Buying Academics As Well

The following is from a nice piece by Ben Walsh and Ryan Grim at the Huffington Post, which has been doing good investigative work lately. The "study" in the headline is an academic study, a "neutral" study produced by university professors. Note that while only one university is implicated, four were involved; the rest have simply failed to respond to requests for information.

Walsh and Grim (my emphasis):
Emails Show Pro-Payday Loan Study Was Edited By The Payday Loan Industry

Private emails show that the payday loan industry heavily influenced key academic research.

The payday loan industry was involved in almost every aspect of a pro-industry academic study, according to emails and other documents reviewed by The Huffington Post. The revelation calls into question a host of other pro-industry academic studies that were paid for by the same organization.

While the researchers disclosed their funding source for the 2011 paper “Do Payday Loans Trap Consumers in a Cycle of Debt?” they also assured readers that the industry “exercised no control over the research or the editorial content of this paper.”

The assertion was patently false, according to correspondence obtained from Arkansas Tech University through an open records request by the watchdog group Campaign for Accountability. The group subsequently shared the documents with HuffPost.

The Campaign for Accountability has filed requests for documents from professors at three other universities -- the University of California, Davis; George Mason University; and Kennesaw State University -- who produced similar pro-industry studies. So far, it has been met with resistance. Only Arkansas Tech turned over a cache of its records.

The emails show that the payday loan industry gave economics professor Marc Fusaro at least $39,912 to write his paper, and paid an undisclosed sum to his research partner, Patricia Cirillo. In return, the industry received early drafts of the paper, provided line-by-line revisions, suggested deleting a section that reflected poorly on payday lenders, and even removed a disclosure detailing the role payday lending played in the preparation of the paper.

Hilary Miller, the president of the Payday Loan Bar Association, a lawyers' group for the industry, worked closely with the researchers on their study. Miller has represented payday lending giant Dollar Financial, and is also the president of the pro-industry group the Consumer Credit Research Foundation.

"This revelation has significant implications for the other research that the Consumer Credit Research Foundation has funded," an industry expert told HuffPost. The foundation’s website lists six studies that it has funded in whole or part, all of which have influenced political debate over payday lending. Papers funded by the CCRF, by academics affiliated with George Washington University and the University of North Carolina at Greensboro, among others, have argued that payday lenders do not target black neighborhoods, that there is no good reason to regulate payday loans to the military, and that payday loans are cheaper for consumers than fees tied to bounced checks. [...]
Check that last paragraph above again. Tip of the iceberg.

Of course, the payday lending industry has an acknowledged predatory business model, but they also have a ton of cash and know how to spend it, whether in the halls of Congress or the halls of what used to be called "academia." And there's an obvious connection between the two halls:
The Consumer Financial Protection Bureau will release a draft of of the first-ever federal rules regulating payday loans before the end of the year[.]

The connection between a pro-payday loan group and academic research comes as there is increased focus on the financial industry's influence over what are apparently neutral studies.
Of course, you may think the payday lending industry is small potatoes relative to the vast ranks of academia. Just the tip of the iceberg. The Koch Bros are in the same game, have been for a while, and their potatoes are anything but small.

The Corporate University

Welcome to the corporate university. I wouldn't expect a reversal anytime soon. This is just too lucrative for all concerned. Even some of the professors have their hands out. Look again at the cartoon and caption at the top. This is what we get for letting the wealthy get very very wealthy.

How the very very wealthy fly to St. Andrews (source)

When everyone's impoverished, everyone's for sale. All part of the plan; in the mahogany halls and gold-plated corporate jets, that's called "mission accomplished."


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At 10:53 AM, Anonymous Anonymous said...

The study was done, after all, in Arkansas. Perhaps the researchers weren't bought by the payday lenders. Maybe they are simply incompetent. Totally insincere apologies for the stereotyping.

At 4:12 PM, Anonymous Dorothy Reik said...

The own the science departments too.


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