LBO on bankruptcy article

michael perelman michael at ecst.csuchico.edu
Sat Aug 22 16:18:07 PDT 1998


The most recent LBO had an excellent article about bankruptcy. The Wall Street Journal has done a piece on the research in support of that law. I have included my notes from an earlier piece by the same writer. Both articles have a common theme -- the prostitution of the university to corporate interests.

Cwiklik, Robert. 1998. "The Problem With Ivory Tower Inc.: When Research and Lobbying Mesh." Wall Street Journal (9 June): pp. B 1 and B 13.

He describes the proliferating hybrid on the nation's campuses: research centers funded by, and working at the behest of, big corporations and industry groups. In the area of science and technology alone, more than 1,000 such centers existed in 1990, up from about 700 in 1980, according to a recent Carnegie Mellon University study funded by the National Science Foundation.

These organizations then produce studies to further the lobbying efforts of the corporate sponsors.

The University of Maine's Lobster Institute in Orono, heavily subsidized by the seafood industry, did a study a few years ago purporting to show that lobsters don't suffer when boiled alive.

The Credit Research Center, founded in 1974 at Purdue University in West Lafayette, Ind., moved last year to Washington, where it operates under the auspices of the Georgetown School of Business. Its nine-member governing board includes four credit-industry executives and five academics, including director Michael Staten, an economist and professor at the business school. Industry representatives make up more than 70% of the center's advisory council, a group that Dr. Staten calls "a Who's Who of credit granters." And industry dollars supply almost all of the CRC's $450,000 annual budget, including Dr. Staten's salary.

Dr. Staten co-authored the center's Visa-MasterCard study with John M. Barron, a Purdue economics professor who sits on the CRC's governing board. Their conclusion: About one-fourth of Chapter 7 bankruptcy filers can afford to repay at least 30% of their unsecured debt, a type that includes unpaid credit-card balances.

## Cwiklik, Robert. 1998. "UPS Tries to Buy Its Way Into the Ivory Tower." Wall Street Journal (6 February): pp. B 1 and B 2.

UPS offered the University of Washington medical school $2.5 million to establish a research chair in occupational orthopedics. UPS asked that a particular researcher at the school, Stanley J. Bigos, be appointed to the chair and granted tenure.

Dr. Bigos is an orthopedic surgeon and professor, whose research has suggested that workers' back-injury claims may relate more to poor attitudes than ergonomic factors on the job.

About 20%, or $2.8 billion, of total contributions to higher education came from companies in 1996, according to the Council for Aid to Education, a New York nonprofit group. Today, corporations increasingly "want something back" for their gifts, says John Coy, head of Consulting Network, a Vienna, Va., firm that advises big companies on their financial relationships with universities.

Cuts in government support for higher education have turned universities into scavengers for private funds, and schools now routinely permit corporate donors not only to name endowed professorships and chairs, but also to select their subject areas. Thus, there's a Coca-Cola Professor of Marketing at the University of Georgia, a Lego Professor of Learning Research at the Massachusetts Institute of Technology (who is also a Disney fellow) and a La Quinta Motor Inns Professor of Business at the University of Texas.

-- Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu



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