Transcript of Baby Formula Shortage Conference Call with Moe Tkacik

Jun 16, 2022

On June 9, The Capitol Forum hosted a conference call with Moe Tkacik to discuss what really caused the baby formula shortage, Abbott Laboratories’ parallels to Boeing, and potential policy solutions to concentration and supply problems going forward. The full transcript, which has been modified slightly for accuracy, can be found below. 


TEDDY DOWNEY:  Thank you. And good afternoon, everyone. Thanks for joining The Capitol Forum’s conference call today on the Baby Formula Shortage. With us today is Moe Tkacik. Moe is a Senior Fellow at the American Economic Liberties Project. She’s a former journalist. She worked for the Wall Street Journal, Time, the Philadelphia Daily News, Philadelphia Magazine, Talking Points Memo and Gawker. And she’s been all over a number of interesting business topics of late, including the baby formula shortage and Boeing’s problems. And I’m excited to chat with her. 


But a quick note before we get the conversation underway. The first 20 minutes or so, we’ll do an interview and then we’ll move into a Q&A format where we will entertain questions from the audience. If you have questions for us, please email them to And Moe, thanks so much for doing this.  


MOE TKACIK: Oh, it’s my pleasure.  


TEDDY DOWNEY: So I think it’s perfect timing for this call because we had a blockbuster report in The Wall Street Journal today with allegations that date back to February of 2021 that the Abbott Sturgis plant was having problems with failing equipment and formula being released without adequate evidence that it was safe for consumption. So more detail here. And maybe a good place to start is just at a high level. What caused this shortage? How did we end up here?  


MOE TKACIK: Great. Well, the cause of the shortage, I think, is an almost unique case of very profound market concentration. So creating extremely vulnerable supply chain distribution networks, even for us, even for 2022, the fact that Similac is the baby formula brand owned by Abbott and I believe that their share of the market is 47 percent. 


The next player, Enfamil, their share of the market is, I think, somewhere around 30, but I don’t know that. The figures are not—I don’t have IMS data. I don’t have the best data, but I have seen that 47 percent figure for some time. And this is not a new thing. Enfamil and Similac had really been in those market positions I think for decades. And they have been repeatedly accused of price fixing and all sorts of anti-competitive behavior. Because there are other companies—Nestlé is a big one, Gerber—that has tried to enter the baby formula market and has been shut out by various sort of specific nuances of the market for baby formula. 


So the biggest one is the WIC programs, the Women, Infants and Children program, which is said to buy at least half or more than half of the baby formula sold throughout the United States and purchases that baby formula in these state level auctions that generally award a monopoly in that – that force you to buy, depending on if you are a lower income woman with a child who consumes baby formula in any given state, you buy either Similac or Enfamil.  


So that is a really unique and special way of running things. But even before the WIC program existed, Enfamil and Similac were the two real giants of that industry, and Nestlé was probably number three. But they got almost driven out of the baby formula business in the 1970s when there was enormous controversy over their marketing of baby formula to women in Third World countries who do not understand that—women in Third World countries who had previously just breastfed their children and were mixing it with contaminated water and were diluting it, and it was causing epidemics of malnutrition. 


And at that point in the seventies, it sort of became understood by new, more affluent mothers and the pediatrician community that baby formula was sort of a corporate scam. And breast milk was actually much more nutritious. And it was better to try to breastfeed your child if you possibly could. That sort of turned the baby formula business in the United States into a permanent sunset industry.  


And what you see on display in the Sturgis plant, Abbott produced it seems like every specialty variation on its baby formula, and it seems like it produced the majority of Similac. You see this very classic sunset industry sort of mentality on display. When the financial community has decided that your industry has very limited growth and it’s no longer sexy, the management tends to get very financialized, very aggressive about just trying to wring as much cash out of it every year as possible.  


And so that’s kind of what happened. They made an agreement to refrain from marketing baby formula in any way in magazines and limit their marketing efforts specifically to hospitals and pediatricians and basically kind of muscled other players out of those markets. And then the formation of these statewide, these monopoly WIC programs that sort of just cemented a duopoly that was already in place in the nineties, I believe. 


So that is why we have this incredibly concentrated market. Now, there are other Similac plants. There’s one in Virginia. There’s one in Arizona. I think there used to be a few more. But they do not, from my understanding, produce anywhere close to the volume that the Sturgis plants did. And then again, the Sturgis plants exclusively produce certain kinds of specialized formulas. Because a lot of babies if they’re on the retail—if a white collar child is consuming formula, that’s largely – like it’s probably because they have some—they’re fussy. And babies are extremely fussy. I mean, for my first year of my first child, he would not drink a formula that wasn’t Enfamil. Like I mostly breastfed. But you have to supplement when you wait tables, which is what I was doing at the time. So yeah, he would never drink a formula that wasn’t the one that he went home from the hospital with. 


So that’s another thing that sort of contributes to the concentration is that babies are very fussy. They’re very loyal customers. If you try to give them something, if you try to give them like a generic brand, they’re likely to not really go with it unless they’re extremely, extremely hungry. So there’s all these factors sort of playing into this industry. It’s kind of like a stealth, like very, very extraordinarily concentrated, even by our very concentrated standards. 


So the Sturgis plant in Michigan was—I haven’t seen it, but by all accounts, especially the account of this whistle blower, it was not upgraded. It was not, you know, there was a culture of sort of cutting corners and falsifying a lot of the record keeping associated with heavily regulated businesses. There was a culture,—and this is really important—of if something, if some malfunction had occurred, if something had gone wrong that was related to—where the root cause was mechanical failure, that there was a culture and there was like a systemic practice of blaming that mechanical malfunction instead on human error, which would avoid the requirement to invest in upgrading the plant or maintaining the plant, and certainly most likely pad somebody’s compensation. Because that’s a metric when you’re working in these kind of sunset industries where there’s not a whole lot of growth and the margins aren’t that high, avoiding unnecessary capital expenditures or whatever, even if they’re very necessary, is what’s going to get you the bonus. 


So there was there was a dilapidated plant. There was a lot of corner cutting. And then there was a lot of, you know, there were these episodes because there were drying machines that were malfunctioning because of the design of certain tubes. I don’t know how it works, but it’s explained in relatively good detail in this whistleblower report that were causing the formula to not dry as quickly as possible and bacteria was starting to – or micro-organisms were starting to develop in the formula. And they were testing the formula and finding tainted batches. They were finding Cronobacter in the batches. And when they found this, they kind of wrote up a report that was inconclusive. They hid it from FDA inspectors that this had ever happened. They didn’t throw away all the formula that could have been tainted, but they threw away the formula that was likely tainted. So there were all these, you know. 


There was this episode. The FDA found out about it. Ultimately, the FDA came in, tested a bunch of areas at the facility, found that Cronobacter was growing in various areas in the plant and said, hey, you’ve got to shut this down. They did an inspection that revealed contamination in October or in September. And then they did another inspection, a follow-up inspection, in February. And nothing had changed. Nothing had been dealt with. And so they said we have to shut this plant down basically because we don’t think that we can trust you to fix the problem anymore. They’d kind of been operating under assurances that everything would be sort of dealt with. 


So they shut down the plant and this created an enormous shortage about a month and a half later when the plant was no longer producing formula. And the shortage was heavily concentrated in states where Similac was the monopoly provider. But it was also kind of—it was not something that I think parents were prepared for. It just kind of emerged at one point. And it’s not something that, even though Washington, D.C. was suffering from these shortages pretty severely. It was one of the markets where—I mean, I was trying to see where I could buy a can of formula and it was out in the sticks generally. Like Southern Maryland was the closest. 


So even though this is actually kind of affecting Washington, D.C., it’s a very white collar culture here obviously. I don’t know if it’s very lactation friendly to work from home or to work in a white collar environment where there’s a couch. I mean, in my office in DuPont Circle, there’s a room with a white noise machine and a nice, really comfy seat and like these Zen sort of paintings on the walls. So it’s a very, very different environment when you can’t work from home and you have to actually show up and work somewhere and clock in. Pumping is just—it’s so - [break in recording]  


TEDDY DOWNEY: All right. Sorry about that, everybody. So the monopolies are trying to cut off our phone lines again. So Moe, you were just saying that pumping is just so difficult before we got cut off.  


MOE TKACIK: Yeah. I mean, I would just say that in general, there’s been a lag in terms of the responsiveness of our elected officials to the problems of working people. As Katie Porter referenced a few weeks ago, when she told Politico about how sort of clueless her Democratic colleagues were about food and food price inflation and how it didn’t really hit her until she was buying bacon and she realized that it was $10. There’s a real lag in the acknowledgment, realization, discovery of these problems within the political ruling class in Washington. Because they don’t, for the most part, buy baby formula. They certainly don’t like depend on it, I would say. But that is privileged because it is very difficult to breastfeed while blue collar.  


So we have that kind of situation. And what’s really—so with this latest revelation that it was actually February 2021 that this should have first come to the attention of the federal government. I’ll say this. OSHA is the original recipient of this terminated employee with the whistleblower’s complaint. There were workplace safety issues that were addressed in the in his 34 page report to the FDA. That report was clearly written by an attorney. It was very, very, you know, it had all of its ducks in a row. It was very compelling reading. Clearly, it had taken a while to get to that point.  


So I don’t really know the specifics of the original complaint or the gentleman’s determination. He had obviously a lot of concerns. But workplace safety played into it. And you have to consider that in February 2021, like the number of workplace safety complaints that were very serious, reported to OSHA throughout the pandemic, was truly mind boggling. The Coronavirus really created extreme awareness of workplace hazards. It made a lot of workplaces far less safe than they had been. And I know that the Trump administration was not really terribly responsive to any of those complaints. I think that there were definitely lots of reports that they just ignored them altogether. Just having written about health care, I know that—I don’t think that – so I’m sure there was an incredible backlog when the Biden administration assumed the reins of that agency. And I’m sure that they had a lot on their plate as the FDA does. And so I’m not surprised that it took its time and that the gentleman’s attorney ultimately decided that taking it up with the FDA was the better course of action. But when you work at a plant or you work anywhere, OSHA is the agency that has the signs. Like OSHA is the government agency that you kind of think to alert or that they have a pretty well established, anonymous tip line. And so I think that it kind of also does make sense that that would have been the first agency that he would have approached. 


So yeah, I think that it’s interesting. But clearly, the problems at the plant had been going on for like 5 to 7 years, according to the report. So it wasn’t surprising to me that the government had some other earlier awareness of this. But when you think about OSHA, I mean, I just can’t – 


TEDDY DOWNEY: You’re not surprised. 


MOE TKACIK:  —them being very responsive to this or even thinking about the danger to infants just because from meatpacking plants to hospitals. I mean, I wouldn’t know where to begin if I ran OSHA to be quite honest. And also, like what kind of—I don’t know what situations were the most urgent. So, yeah. 


TEDDY DOWNEY: We’ve talked a lot about this problem. And ultimately, this resulted in one plant being shut down that created a nationwide shortage that kind of makes it pretty clear that the monopoly control, monopoly power, in specific states really is at the heart of the problem here. Or is one of the problems at least, one of the big problems. 


I want to get into talking about similarities that you see between Abbott and other companies. But before we do that, I do want to think if we were going to restructure this market, you were going to make it so that you wouldn’t have this systemic risk in one plant, what would you recommend? Do you think the government has to rethink WIC? Put out bids for multiple kinds of formula in each state? Change the regulatory process for allowing alternative kinds of formula to enter the market? I have a friend who tried to import some formula from abroad and got in trouble for it. Like there’s not a lot of options, clearly, to purchase alternatives.  




TEDDY DOWNEY: What are a couple solutions? We love to learn about problems. We also kind of like to think about solutions here. What would be some of the solutions in your mind to fix this issue? Or is it something like making Abbott spin off its division so it actually cares about operating the plant well? What are your thoughts? 


MOE TKACIK: So clearly, the design of the WIC program with the state monopolies exacerbated this enormously and it seems pretty pointless. I do think that if you were just sort of trying to create a system, something as vital as infant formula in a situation like that, you know, I would say that nationalization and/or utility style regulation would be the kind of obvious problem, especially if the majority of this product is purchased by the government.  


But I know our government and I don’t think that—I think that competition is actually a more pragmatic, a more effective—would be a more effective answer just given our government’s real failure of lack of capacity for sort of solving complex problems and producing stuff. I don’t know. That’s one thing. 


I do think that we get—the thing is that like the extreme concentration in the baby formula market is a problem. And there are—it shouldn’t be—there shouldn’t be that—there should be more players in the market. I mean, one of the reasons that Reckitt, the owner of Enfamil, is trying to get out of. They’re trying to sell their baby formula business right now. They already sold their Chinese baby formula business because it was just too competitive in China. There were too many competitors. They thought that they would have—there was a huge, tainted formula scandal a few years back in China and Enfamil thought that they were going to take a huge chunk of the market and that Chinese—the end of the one child policy was going to make it into a growth market. They just thought, oh, it’s too competitive. 


I think that there needs to be financial regulation—every regulatory agency needs to have the ability to financially regulate companies that they oversee, that are clearly hoarding cash and shortchanging everybody else, shortchanging the public, shortchanging workers, shortchanging the competitive landscape, shortchanging the future of our economy. That’s something that you see. 


So in these situations—I’ll bring Boeing into it and the many oil refineries that have been sort of shut down or kind of turned into like a shell of themselves, hospitals here. There are so many institutions that fall under this category. But these are institutions that derive a massive proportion of their revenues from the federal government, whose products lend themselves to monopolization because they are so closely regulated and the government is such an enormous buyer of them.  


And over and over again, you see these companies doing the same things, not investing in their plans, spending all their money on stock buybacks and dividends, selling off important, you know, closing down plants to make their operations more efficient. But efficiency in that case means vulnerability. It always stems from the same motive, which is rain more money down on shareholders. And that’s something that we need to curtail.  


And so the way that I see it, like a commonsense approach would involve allowing the FDA, allowing the FAA, allowing OSHA, allowing CNS to ban, to restrict, companies that they oversee from issuing dividends overcompensating CEOs or buying back stock, engaging in these cash extraction activities if they have a documented track record of putting profits before safety, of flouting the rules, in order to line their pockets. 


TEDDY DOWNEY: Yeah, sort of like the authority that bank regulators have when banks get too risky.  


MOE TKACIK: Exactly. 


TEDDY DOWNEY: I mean, at least that’s one area when they think about systemic risk, we’ll put a cap on growth or a cap on deposits or a cap on restrictions on buy backs. I mean, they think about that exact thing. I think there’s two— 


MOE TKACIK: Right. And they have leverage limits and you’re not allowed to bail out banks that are giving out loans right and left to their cronies for dubious real estate deals. I mean, this is, yes, apply bank style regulation. And I really believe that. And incorporate some sort of FDIC resolution process. Like if we want to talk about how to—like incorporate the idea of nationalization into this regime that I’m talking about, you have to introduce FDIC style bank failure to a lot more industries. 


Nursing homes would be, I would say, number one on that list. We have thousands of nursing homes out there that are absolutely abysmally failing. Everybody, all of their residents, where residents are dying. I’ve covered this industry very closely. But you were lucky if you died of COVID because most likely you’re going to die of bedsores or a fall that isn’t treated. You’re going to die a much more prolonged and painful death. And we know this is happening. This is very well documented by our health department inspectors. But the money keeps flowing in from CNS. And nursing homes, I think, 85 percent of their revenues come from Medicare and Medicaid. So this is like a problem that we could end by cutting them off. But there isn’t the capacity. There isn’t the kind of courage. And there isn’t the capacity and there isn’t the kind of protocol for going in and saying, okay. We’re not going to throw any more good money after bad. Like we’re taking over. And you don’t own this place anymore.  


Like—this is basic stuff—but instead what we get is something like I remember there was a great story in The New York Times—in The Washington Post in like 2019 about Boeing just racking up this unbelievable list of really flagrant violations in its 787 plant, which is ununionized, of course, in North Charleston, South Carolina. And the FAA finally decided to get tough on Boeing. And they fined Boeing $12 or $15 million. Like that was getting tough. And it’s like this company has spent $65 billion on buybacks and dividends in the past—I think it’s seven years. It’s like $15 million is like in their couch cushions.  




MOE TKACIK:  So there isn’t that ability of any of these regulators to look at the big picture and really lay down the law and really actually bring about the, you know, force the changes that they want, that are required to comply with the law. So that’s the way I would fix it. Obviously, because— 


TEDDY DOWNEY: It seems a little like a twopart problem in that some of these industries, I mean, we could go through a lot of them, but like for profit colleges is one we look at pretty closely, getting their money from the federal government. 


MOE TKACIK: Exactly. 


TEDDY DOWNEY: They do have protocols. They do have a whole laundry list of ways to cut the industry off from Title IV funding.  


MOE TKACIK: Absolutely.  




MOE TKACIK: And yet, for some reason it doesn’t happen.  


TEDDY DOWNEY: Yeah. And I would say the same thing, you have similar story when you say utility style regulation. A lot of utility regulators, particularly at the state level, have pretty—and even regulators like the FCC—have pretty expansive public interest authority that they don’t use. 




TEDDY DOWNEY: And not necessarily resolution authority, but they have a lot of power to make sure you’re investing appropriately or providing the services that you’re saying you’re going to provide in the public interest. And that’s not used. So you sort of have this like industry that has the authority and their regulator is either corrupt or inept or disinclined to do something.  


MOE TKACIK: Captured.  


TEDDY DOWNEY: Captured. And then you have lack of authority. And so, I see what you’re saying in terms of that being a systemic issue. I do think though, one thing I would say—and again, if you have questions for us, please email them to  


The one thing I would say though, I do think a lot about procurement. And to your point about nationalization, really, you still would need,—even if you were going to nationalize it,—you would still need to set up a market for production where you don’t have one plant making it all, right? So the rules, you need to design a competitive system that (a) doesn’t concentrate the production and (b) that would be more easily satisfied by having several different companies producing it. To your comment about, well, the industry just gets out of the market when it gets too competitive. I mean, some people don’t want to be in a competitive market. 


MOE TKACIK: I don’t think that anybody does. I don’t think that financing allows it. And that’s why we need like a dramatically overhauled regulatory regime and that antitrust is absolutely a weapon that we need to wield. But in terms of the financing regime that we have here— 


TEDDY DOWNEY: You’re saying, like private equity or public markets don’t want to finance a competitive industry. I think that’s fair.  


MOE TKACIK: Right. And venture capital only wants to finance a future monopoly. I mean, that’s what all of venture capital is aligned around doing. 


TEDDY DOWNEY: Yeah. But there are plenty of businesses that are in competitive industries that— 


MOE TKACIK: I mean, restaurants are competitive. Independent restaurants are very competitive. And that’s one of the reasons that you’ve seen wages at restaurants really skyrocket while wages have been super stagnant. And a lot of—there’s been some wage growth in like care work. But I think that competition is extremely vital too. But I do think that in this case, it’s been a fixture. This duopoly has been a fixture of our economy for a really long time. It’s a little bit harder. And like it’s heavily regulated. I do think that there’s for sure opportunities.  


Like the concept that European-regulated—European baby formula is actually much, much healthier. I think there’s a lot of new parents who realize—I mean, breastfeeding does suck on so many levels. And it really—it’s not—there’s an opportunity. Again, I think that there’s this sort of a gentlemen’s agreement I want to say in the baby formula industry, like to not advertise. And pediatricians are kind of like an important audience there. So I don’t think it’s the easiest industry to break into. But I mean, with any of these things, more competition would be more ideal. I mean, certainly in baby formula, it’s not commercial airplanes. It’s not something where the industry’s going to gravitate. The barriers to entry are just so enormous. The barriers to entry have been erected by companies like Abbott.  


So you look at, you know—and I think that there is a case to be made. I mean our Research Director, Matt Stoller, is thinking now about how do we deal with these sort of conglomerates like Abbott that have all these sort of unrelated businesses and aren’t really focused, are sort of run like private equity firms. Clearly in Abbott’s case, its operating margins are insane. Abbott already split off from AbbVie in 2012 I think. And when they split off, AbbVie promised that by 2020 its operating margins would be 50 percent which is insane.  


And that’s another thing that we also have to think about is efficiency to a CEO of a company like Abbott means higher profit, means more money spent on dividends and buybacks. And Abbott is a dividend king. It’s been paying a higher dividend every year for 50 years straight. But profits are like grotesquely inefficient for everybody else for 99 percent of Americans. That is just the hoarding, the kind of like pathological hoarding, of resources. What are they buying it on? They’re running up fucking NFT prices for a while. Like there it is not like on any level. And it’s very frustrating that our entire—like most of our political establishment and legal establishment has a definition of efficiency that is kind of grotesquely inefficient. Like it is completely—it’s Milton Friedman’s definition and Michael Milken’s definition. But it is not an efficient way of delivering. And just to like give you an— 


TEDDY DOWNEY: Well, I mean, just to kind of like make this point in one way. Obviously, the reason to have one producer of baby formula ostensibly would be because it’s more efficient in each state, but it ended up with a massive systemic risk and a shortage, right? I mean, that’s clearly not efficient.  


MOE TKACIK: I don’t know honestly why it was set up that way. I think that like in a lot of these cases where you have a heavily regulated and monopolized industry, you get a dynamic where there are carrots and sticks. And I feel like in emergency rooms, for instance, like why were emergency rooms—why did they become synonymous with surprise billing? Why did emergency rooms and ambulances become synonymous with these unbelievable bills that nobody could ever pay, right? That would destroy your life. It’s because Congress passed a law. And EMTALA, the Emergency Medical Treatment and Labor Act, requiring hospitals with emergency rooms to treat everybody and stabilize them regardless of their ability to pay.  


So as a result of them complying—and they don’t really comply with it, but whatever—agreeing to comply with this law, they kind of were given unofficial carte blanche to gouge everybody else. And that’s, I think, a dynamic that you see over and over again in these industries that are heavily—I think for profit universities are sort of an example here. I think that like, you know, they’ll say that they are, you know, you deal with these industries that sort of agree to—so they’ve agreed to sell formula to the WIC program for a very low cost. You know, I don’t know what the profit margins on those sales are, but I imagine given that the operating margins for the Abbott nutrition business were probably around like 12 percent, I’m going to hazard a guess that the operating margins of the WIC businesses are probably under 5 percent. Maybe close to like one or two percent. I don’t know. But the result is much higher prices on the shelves for us.  


And because it’s not a growth industry, the production—and because the production is very solid. Like you go through the same amount of baby formula. You can probably calculate the amount of demand for baby formula very, very closely if you’re Abbott and you know kind of because a baby drinks X amount and it’s not something—they don’t do—they don’t eat anything else. So it’s kind of—it’s a probably easily modeled demand.  


So that kind of business just does lend itself to this extremely lean supply chains. And the only way to unlean a supply chain like that would be to have a lot of competition. But again, like I said, there’s a lot of structural barriers that are not even, you know, there are structural barriers that the government imposed. There’s structural barriers that the sort of medical community has imposed. But it’s a specific, that is a specific problem and it’s one that I think that this whole debacle will shift. I think you will see, you know, Abbott has been—I think you will see more consumers sort of thinking about different formula brands, thinking about European formula. You’ve shifted the nature of the demand. I think that, you know, I think that it will be—I think that this scare might cause—maybe it will cause more people to start breastfeeding, even if it’s really hard to do. This will shift things more than, I think, almost anything else could. We are still dealing with, yeah, why are they producing it all in one factory? And that’s a question for—that’s a problem. And it would be—if we had an industrial policy, that would be a problem for them, right? But we don’t have an industrial policy.   


TEDDY DOWNEY: Yeah, it does seem that in terms of competition it’s setting up a system where you have multiple options that would encourage the companies to actually have smaller factories.  


MOE TKACIK: Eliminating—I mean, if we had any sort of regulatory agency, like I said, this would be a problem for industrial policy experts. Single point of failure overseers, right? If we had, I guess, the Department of Transportation, some of this would fall under their rubric. But it’s just something that we don’t—that we haven’t thought a lot about because we don’t think about our economic problems from a systemic level because we don’t think about, you know, because we don’t want to talk about having an industrial policy. I mean, I think this is a very strange situation, baby formula mostly manufactured in the United States.  


That actually, you know, it turned out when we were facing an N95 mask shortage, we still had mask production in the United States. That’s unusual—If we hadn’t, I think that those shortages would have lasted a lot longer. I think that 3M, despite being another one of these kind of like soulless conglomerates, it is a company that was run by like—an engineer who was like a long time, like a lifetime employee of 3M and they ramped up production. But we do have this unbelievable trade deficit that grows every year and people act like it’s not a problem and inflation happens. And our answer is to do away with tariffs. Like we do not have a political class that’s interested in actually solving our major systemic problems. And that’s a deeper issue. 


TEDDY DOWNEY: Yeah. One of the problems I have being in D.C. is there’s sort of this allergy to learning and rigor among most people here unfortunately. It makes it a little hard to have a substantive conversation about solutions. But we could probably have a whole separate call about that. But Moe, I wanted to thank you so much for doing this and talking about Abbott and financialization and how kind of complex this problem is. And thank you. Thank you for your time and for all the other work you’ve done on this.  


MOE TKACIK: Awesome. Thank you so much for having me. And yeah, hopefully we’ll have some forthcoming work on how you can see these problems throughout our current woes. And it’s really a shame that the political establishment has been incapable of even explaining the problems that we have right now with the obvious causes that should be obvious to everyone.  


I mean, it shocked me more than anyone that this tweet of mine went viral on Abbott spending money on buybacks as opposed investing in its factory. I wasn’t looking at this problem. I thought it was like an easy call. And there’s so many more examples of this. So hopefully— 


TEDDY DOWNEY: Yeah, I particularly like how you – you know, I make the analogy to bank regulation just in the sense that they at least understand or at least try to understand systemic risk. That’s what you have here. You had a systemic risk at one factory and it got shut down. And that type of—they look at.  


MOE TKACIK: Right.  


TEDDY DOWNEY: Financially, what makes you risky? Like I said, the same thing happens at for profit colleges to some degree. But other agencies—and we’ve seen this. There’s a history at the FTC and the DOJ have ignored this type of analysis of how a business really works.  




TEDDY DOWNEY: Financing does create a lot of the incentives. I mean, you could just read the phrase financialization is like actually understanding how the business works. What are their incentives? How do they spend their money?  


MOE TKACIK: Right.  


TEDDY DOWNEY: Who owns it? You know, who runs it? What’s their background? And you can learn a lot about how they’re going—whether or not they’re going to invest in making new formula or designing better formula or making it more nutritious or just making sure it’s not poisoning people from just doing a rigorous analysis in that respect. So hopefully, there will be some interest in looking into that from a rigorous standpoint going forward. Look forward to seeing any work from your end. Again, thank you so much for doing this. And thanks, everyone, for joining us on the call today. And that concludes the call.  


MOE TKACIK: Thank you.