Throwback Thursday: Expensive Consumer Credit Research Tainted With Bias
The National Science Foundation’s program called Research Applied to National Needs spent $397,000 in 1976 — more than $2 million in 2022 dollars — for a scientific and unbiased study but awarded the contract to a biased party, earning it the Golden Fleece Award for July that year.
Sen. William Proxmire, a Democrat from Wisconsin, gave awards to wasteful and nonsensical spending, eventually handing out 168 Golden Fleece Awards between 1975 and 1988.
The National Science Foundation awarded the contract “to perform an unbiased and scientific study of consumer legislation and services to a principal investigator and research center which have an overwhelming bias in favor of the credit industry,” Proxmire said at the time.
“This is like asking the Air Force to study the need for the B-1 bomber or the oil and gas industry to evaluate the depletion allowance,” Proxmire said.
The contract was awarded to Dr. Robert W. Johnson, executive director of the Credit Research Center at Purdue University, but it shouldn’t have been given to them, the senator argued.
He noted that the Credit Research Center at Purdue University is partially funded by the credit industry, and of the advisory council’s 37 members, 33 are affiliated with the credit industry.
Of the nine people on the center’s governing board, four are credit industry executives, Proxmire said. And Johnson himself was a principal witness against the Truth In lending legislation when it was before the Senate. The act protects consumers against inaccurate and unfair credit billing and credit card practices.
Johnson has also received support from the credit industry, Proxmire alleged, to give it research and other materials that were used in testimony against other consumer legislation that’s now law.
“The conflict is so blatant that there is no way the research can be accepted as unbiased whatever its results,” Proxmire charged.
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