#keith devlin

Here is the keynote I presented at our reunion last week in Odense, of Danish alumni of the Stanford H-Star fellowship program (2010 to 2015). Keith Devlin (H-Star director emeritus) and Connie Svabo of the Research Center for Science Education and Communication (FNUG) at University of Southern Denmark [Link], were our hosts. The program enabled about 50 scholars from Denmark to spend a few…

A deadly bacteria outbreak in baby formula and an ongoing formula shortage stem from issues some economists characterize as “rot” in the nation’s economic system: prioritization of shareholder wealth and consolidation.

The embattled baby formula producer Abbott used windfall profits to enrich investors instead of replacing failing equipment that was likely injecting the dangerous bacteria into its infant nutritional products, financial records and whistleblower documents show.

Abbott detected bacteria eight times as its net profits soared by 94% between 2019 and 2021. And just as its tainted formula allegedly began sickening a number of babies, with two deaths reported, the company increased dividends to shareholders by over 25% while announcing a stock buyback program worth $5bn.

“Abbott chose to prioritize shareholders by issuing billions of dollars in stock buybacks instead of making productive investments,” said Rakeen Mabud, chief economist for the Groundwork Collaborative, a progressive economic advocacy group. “It’s important that we have high standards for something as vital as baby formula.”

Abbott denies share buybacks hurt safety but the controversy has some economists calling for stricter anti-trust enforcement, bans on buybacks and limits on dividends.

The tainted product triggered a February recall of three popular Abbott infant formulas, including Similac, when batches likely tainted with the rare Cronobacter bacteria killed two infants and sickened two more. The FDA and CDC reported the babies “consumed formula produced at the Sturgis, Michigan” facility before they got sick, and the bacteria “may have contributed” to their deaths.

Abbott halted production at the Sturgis plant, the nation’s largest, but the company has since downplayed the controversy and claimed “there is no evidence to link our formulas to these infant illnesses”. Federal investigators said it was not clear either way. “Right from the get-go we were limited in our ability to determine with a causal link whether the product was linked to these four cases, because we only had sequences on two,” FDA’s food director Susan Mayne said in a media briefing on Monday, ABC News reported.

Regardless, the operation remains paused, and the deep cut into the nation’s formula supply is partly a result of consolidation: Abbott and three other companies control nearly 90% of the market, Mabud said, and Abbott alone makes 43% of US formula.

“When Abbott halted production that whole market was disrupted, and the result was desperate parents around the country couldn’t feed their babies,” Mabud added. “We don’t have a resilient supply chain, not for baby formula and not for a whole host of other goods.”

In the two years ahead of the recall, Abbott’s net profits jumped from $3.6bn to $7.1bn, its operating margins improved, and revenue in the US pediatric nutritional division increased by about 16%, Securities and Exchange Commission filings show. Company executives in earnings calls attributed the new pediatric nutritional revenue to market share gains and price increases, while COVID tests were a boon to the parent company.

The federal whistleblower complaint alleged some of the Sturgis plant’s equipment that caused the bacteria to get in the product “was failing and in need of repair”, and company management was aware of the issue for up to seven years ahead of the outbreak.

“A number of product flow pipes were pitting and leaving pinholes. This allowed bacteria to enter the system and, at times, led to bacteria not being adequately cleaned out in clean-in-place washes,” the report reads. “This, in turn, caused product flowing through the pipes to pick up the bacteria that was trapped in the defective areas of the pipe.”

The problems are not limited to ageing equipment, according to the whistleblower. Management at the plant also falsified records, improperly trained employees, and successfully hid health and safety risks from the Food and Drug Administration auditors in 2019.

Companies like Abbott are “using every product as a personal ATM” by cutting corners to maximize profits, said Moe Tkacik, a senior fellow at the American Economic Liberties Project.

In the short term, Joe Biden has invoked the Defense Production Act to speed production of infant formula and authorized flights to import supply from overseas, while the FDA approved a deal with Abbott to bring the Sturgis plant back online within several weeks.

But long-term solutions will require more bold steps, Tkacik said, like a ban on buybacks and restrictions on dividends. She acknowledged such ideas are dismissed as “socialistic”, but noted buybacks were illegal until 1982 because they were considered a form of manipulation. Annual buyback program expenditures among S&P 500 companies are often exceeding research and development or other investment, Tkacik said.

Restrictions on dividends are reasonable for companies that receive federal funding or whose largest customers are federal programs, like Abbott, she added.

A spokesperson for Abbott said: “Stock buybacks are not impacting our ability to invest in or reopen our Sturgis manufacturing facility; in fact, our strong balance sheet has allowed us to invest in our facilities, including in Sturgis, and will help us make additional investments and more quickly restart the facility.”

The Senate Finance Committee chair Ron Wyden on Wednesday requested information about Abbott’s stock buyback program.

Mabud said Congress and the President need to use the “wide array of policy tools that are on the table” to address consolidation, including breaking up companies when appropriate, empowering the FTC, taxing companies appropriately, and investing in diversification in consolidated industries.

[A]lgebra provides methods for handling entire classes of numbers, rather than specific numbers (which is what arithmetic does). (Those x's, y's, and z's come in to talk about classes of number, but that's just an implementation detail introduced in France several centuries later.)

Second, algebra provides a way to find numerical answers not by computing, which is often very difficult, but by reasoning logically to hone in on the answer, using whatever information is available. Thus, whereas in arithmetic you work forwards, starting with numbers and computing with them to arrive at an answer, in algebra you work backwards, starting by postulating an answer and reasoning logically to figure out what it is. True, this powerful application of human logical reasoning capacity frequently gets boiled down to mastering various symbolic procedures to "Solve for x," but again that's just a particular implementation. "Numerical forensics" would be a sexier, and more descriptive, term for the real thing.

When al-Khwarizmi wrote his book (the world's first algebra textbook), apart from the familiar ten symbols for numerals, there was not a single symbol anywhere. No formulas or symbolic equations to be seen. Al-Khwarizmi was showing the traders and engineers of the 9th Century how to solve the numerical problems they faced in their daily lives. The focus was on how to think about problems, and had nothing to do with manipulating symbols. . . .

So, I haven’t said much recently about what’s going on in my life, and maybe some of you would like to know, so here’s the big news:

I changed my mind about which subject to major in. 

Some of you might recall that I started out planning on majoring in Linguistics. Well, as I started taking classes, I started to see that I had a greater aptitude for math than I had previously thought. In high…

Looking Through the Eyes of Mathematics

Is it possible to deduce the shape of the universe without stepping outside of it? Henri Poincaré thought so. Similar to how the Greeks were able to discern the spherical nature of the earth (and even its rough diameter) using mathematics, he proposed that we should be able to make conclusions about our universe. Stanford University mathematician Keith Devlin explains the Poincaré Conjecture, which became a legendary problem in mathematics, with the help of a short animation.

Innovative Mathematical Thinking

by Keith Devlin

We read all the time how poorly the US mathematics education system performs compared with other nations, particularly those we compete with economically. The most cited comparison study on which this dire conclusion is reached is PISA, short for Programme for International Student Assessment, organized by the Organization for Economic Cooperation…