The occupation that tops them all

Claire Cain Miller at the New York Times gets the key issue with the gender pay gap:

Flexible, predictable hours are the key — across occupations — to shrinking gender gaps, according to the body of research by Claudia Goldin, an economist at Harvard.

Although in most respects women have made dramatic progress towards equality over the past half century, there is one trend that has counterbalanced the other wins:

Jobs increasingly require long, inflexible hours, and pay disproportionately more to people who work them. But if one parent is on call at work, someone else has to be on call at home. For most couples, that’s the woman — which is why educated women are being pushed out of work or into lower-paying jobs.

The fact that medical doctors have high scheduling flexibility is why…

Female doctors are likelier than women with law degrees, business degrees or doctorates to have children. They’re also much less likely to stop working when they do.

High pay, growing demand, rewarding work, high respect from the rest of society, and flexible scheduling. Not bad if you can stomach it.

Posted in Health, Labor

Amazon as a nonprofit

For most of Amazon’s history it made zero profit. That changed a couple years ago, but although its gross profit margin on revenues is now positive, it is still pretty negligible today.

Amazon is a huge conglomerate these days, but roughly speaking, its businesses can be divided into a boring retail business that we all know well and a technology business that almost nobody knows unless you are a CFO or CIO because it operates server farms and provides technology services to other businesses. The technology business has been wildly profitable for most of this history in contrast with the retail business that usually loses money. Although most stand-alone retail businesses are different than Amazon’s in that they can’t constantly lose money every year, most retail businesses have very low profit margins, particularly if they are competing with Amazon, so this isn’t too far from normal.

So if Amazon’s profits have been zero or negative for most of its history and are negligible today, why is it the third most valuable corporation on the US stock exchange, almost three times more valuable than its competitor Walmart?

Cap Rank


Market Cap



on 8/20/19
















Berkshire Hathaway









Johnson & Johnson



JPMorgan Chase





The reason is that it is using its high cash flow to invest in itself and grow its businesses. Investors are betting that Amazon’s businesses will become highly profitable someday in the future and that is elevating its stock market capitalization. Below is another way of looking at Amazon’s business with adds another line of data for its free cash flow.

Free cash flow is an alternative measure of profitability and one of the big differences is that it includes spending on equipment and assets and changes in working capital. By this measure, it isn’t hard to see how much business success Amazon has had in recent years.

Posted in Managerial Micro

Another ineffective health care treatment Americans waste money on

Gabrielle Glasier writes in The Atlantic about the problems of alcohol abuse and how it is treated in America.

The United States already spends about $35 billion a year on alcohol- and substance-abuse treatment, yet heavy drinking causes 88,000 deaths a year—including deaths from car accidents and diseases linked to alcohol. It also costs the country hundreds of billions of dollars in expenses related to health care, criminal justice, motor-vehicle crashes, and lost workplace productivity, according to the CDC. 

It is a serious problem, but unfortunately America has prioritized a12- step treatments that are ineffective and more expensive than treatments that work. Glasier goes on to say,

In 2006, the Cochrane Collaboration, a health-care research group, reviewed studies going back to the 1960s and found that “no experimental studies unequivocally demonstrated the effectiveness of AA or [12-step] approaches for reducing alcohol dependence or problems.”

The Big Book includes an assertion first made in the second edition, which was published in 1955: that AA has worked for 75 percent of people who have gone to meetings and “really tried.” It says that 50 percent got sober right away, and another 25 percent struggled for a while but eventually recovered. According to AA, these figures are based on members’ experiences.

In his recent book, The Sober Truth: Debunking the Bad Science Behind 12-Step Programs and the Rehab Industry, Lance Dodes, a retired psychiatry professor from Harvard Medical School, looked at Alcoholics Anonymous’s retention rates along with studies on sobriety and rates of active involvement (attending meetings regularly and working the program) among AA members. Based on these data, he put AA’s actual success rate somewhere between 5 and 8 percent. That is just a rough estimate, but it’s the most precise one I’ve been able to find.

AA is part of the incredible amount of bad medical treatment that we are still using such as the “creative diagnosis” of dentists.  Someday people will probably look back at this like we look back at bleeding people with leeches.  Glasier goes on to explain why naltrexone and acamprosate treatments are more effective than AA and the political history of how AA came to dominate.

Unfortunately AA isn’t even the worst part of the addiction “treatment” racket in America.  Money for dealing with the opioid epidemic has attracted charlatans and German Lopez has begun a new investigative series about it.

Posted in Health, Labor


Fascinating statistics about marriage.

sociologist Andrew Cherlin points out, just two years after the Supreme Court decision to legalize same-sex marriage in 2015, a full 61 percent of cohabiting same-sex couples were married. This is an extraordinarily high rate of participation.…

sociologists Natalia Sarkisian of Boston College and Naomi Gerstel of the University of Massachusetts at Amherst found that marriage actually weakens other social ties. Compared with those who stay single, married folks are less likely to visit or call parents and siblings—and less inclined to offer them emotional support or pragmatic help with things such as chores and transportation. They are also less likely to hang out with friends and neighbors.

Posted in Labor

Dismal state of dentistry

Julie Beck wrote that

In America, we treat the mouth separately from the rest of the body, a bizarre situation that Mary Otto explores in her new book, Teeth: The Story of Beauty, Inequality, and the Struggle for Oral Health in America… Specializing in one part of the body isn’t what’s weird—it would be one thing if dentists were like dermatologists or cardiologists. The weird thing is that oral care is divorced from medicine’s education system, physician networks, medical records, and payment systems, so that a dentist is not just a special kind of doctor, but another profession entirely.

Otto says that state of affairs can be traced back to a historical accident in 1840 when some dentists established the first dental college in Baltimore. They approached the physicians at the University of Maryland to suggest that it be incorporated into the medical school, but they were rejected and so they started their own parallel system of education, research, financing, medical records, and licensure.

This doesn’t make much sense because oral health is an integral part of dental health. Otto says that more than a million people each year go to emergency rooms for dental care because they lack other options, but emergency rooms are not good places to get dental care.  As Olga Khazan says:

Despite the fact that dental procedures are some of the most expensive office visits, dental coverage is treated like a garnish—the parsley of the insurance world.

“Medicaid doesn’t acknowledge that you have teeth unless you’re a child,” said Thomas Ritter, a dentist who was volunteering at the event.

One reason for this is that since the beginning of time, dentistry and medicine have been considered inherently distinct practices. The two have never been treated the same way by either the medical system or public insurance programs. But as we learn more about how diseases that start in our mouths can ravage the rest of our bodies, it’s a separation that’s increasingly hard to rationalize.

There have been some attempts to merge the two systems, but dentists have come to value their professional autonomy and prefer to stay independent now. The current system gives dentists more control. For example, when dental hygienists can practice independently from dentists, they can earn more money and charge less for cleanings so everyone wins except dentists who earn 16% less according to one study. Max Ehrenfreund found that

Dentists in some places are so well compensated that they earn more than the average doctor. According to a 2012 report in The Journal of the American Medical Association, the average hourly wage of a dentist in America is $69.60 vs. $67.30 for a physician.

Although I have been fortunate to have found honest, hardworking dentists who care about my family’s oral health, many dentists have been padding their incomes by using what Jeffrey H. Camm called “creative diagnosis” in a commentary published by the American Dental Association (also known as “supplier-induced demand” in the economics literature). Alison Seiffer wrote about this practice:

My household’s level of confidence in dentistry is at an all-time low. About six months ago, my dentist informed me that my “bunny teeth” were likely getting in the way of my professional success, a problem he could correct with a (pricey) cosmetic procedure. If I let him fix my teeth, he told me, he was sure I would start “dressing better.” A few months later, my husband scheduled a basic cleaning with a new dentist. Once they had him in the chair and looked at his teeth, they informed him that the regular cleaning wouldn’t do at all: He would need to reschedule for an $800 deep cleaning. No thanks.

We were convinced we must look like suckers—until I came across an op-ed in ADA News, the official publication of the American Dental Association. The article, by longtime pediatric dentist Jeffrey Camm, described a disturbing trend he called “creative diagnosis”—the peddling of unnecessary treatments. William van Dyk, a Northern California dentist of 41 years, saw Camm’s op-ed and wrote in: “I especially love the patients that come in for second opinions after the previous dentist found multiple thousands of dollars in necessary treatment where nothing had been found six months earlier. And, when we look, there is nothing to diagnose.”

…Poking around, I found plenty of services catering to dentists hoping to increase their incomes. One lecturer at a privately operated seminar called The Profitable Dentist ($389) aimed to help “dentists to reignite their passion for dentistry while increasing their profit and time away from the office.” Even the ADA’s 2014 annual conference offered tips for maximizing revenue… more and more young dentists are taking jobs with chains, many of which set revenue quotas for practitioners. This has created some legal backlash: In 2012, for example, 11 patients sued (PDF) a 450-office chain called Aspen Dental, claiming that its model turns dentists into salespeople. Some corporate dentists appear to have crossed the line into fraud. In 2010, Small Smiles, a venture-capital-owned chain with offices in 20 states, was ordered to refund $24 million to the government after an investigation found that its dentists had been performing unnecessary extractions, fillings, and root canals on children covered by Medicaid. A new lawsuit alleges that some toddlers it treated underwent as many as 14 procedures—often under restraint and without anesthesia. …Several other pediatric dentistry chains have been sued over similar allegations. ….

This isn’t a new problem although it might be getting worse. As America’s teeth have gotten healthier and need less dental treatment due to better brushing and fluoride, dentistry has found other ways to boost revenues at a double-digit growth rate.

One way dental offices have increased revenues is by offering a more spa-like experience with aromatherapy, nicer decor, Netflix, weighted blankets, hoise-cancelling headphones, massage, cake, and other services that make a dental visit a more pleasant experience and allow them to charge a premium.

Unfortunately, another way they have increased revenues is by tricking patients into getting excessive treatments.  Readers Digest did an experiment in 1997 in which award-winning journalist William Ecenbarger visited 50 dentists in 28 states and wrote an article entitled, “How Honest Are Dentists?” For the baseline, he hired a panel of expert dentists from a dental school to tell him what they thought he should get. They all agreed that he should get one crown and he might need a filling although some thought he could wait and see. They estimated that the total cost for his dental care should be between $500 and $1500. Then he went out into the wild dental marketplace, and he got wildly varying opinions. Indeed 79% of dentists exceeded the recommendations of the panel of experts and creatively diagnosed urgent problems that would generate more revenues. At the same time, 30% missed the real molar problem that needed capping and more than 72% failed to do two low-profit preventative screenings that the ADA recommends:

  • 72% neglected periodontal screening
  • 58% neglected oral-cancer screening

Here is a chart showing the six most egregious examples of “creative diagnosis”. Note that two of the dentists wanted to do 28 crowns!! That would mean crowning every single tooth if (as is likely) he had already had his wisdom teeth extracted.


(# most expensive)

# of crowns (C) and fillings (F)

Total estimate

Panel of Experts 1C, 1F (maybe) $500-$1,500
(6) Englewood, OH 11C, 5F $8,347
(5) Seattle, WA 17C $10,735
(4) Memphis, TN 28C $13,440
(3) Albuquerque, NM 22C $14,445
(2) Salt Lake City, UT 28C $19,402
(1) New York, NY 21C $29,850

Oddly, although there are lots of responses to the original article on the internet, Reader’s Digest doesn’t have anything about it, so they seem to have buried one of their most important and popular pieces of investigative journalism.

Although I have found great dentists, I have also had some who overdiagnosed. One dentist wanted to replace all of my teeth and my wife’s teeth with implants (like you frequently see advertised on the internet) and he told my wife that she has ugly “buck teeth” that she deserves to have replaced. Three other dentists completely invented cavities that no later dentist has seen. And even good dentists frequently exceed the ADA recommendations. For example, they like 6-month checkups whereas the ADA thinks most people are of low risk and only need annual checkups. Dentists also overdo X-rays. The ADA recommends waiting 2-3years between X-rays if there are no cavities.

In addition Joseph Stromberg suggests that dental patents should beware of:

1. Dental practices that advertise and offer deals.  As he says,

The reason for this is that advertising-driven offices often use deals as a tool to get patients in the door and then pressure them to accept an expensive treatment plan, whether they need work done or not. Oftentimes, they’re corporate-owned chains, like Aspen Dental. “These big chains are kind of dental mills,” Mindy Weinman said. “They’re the ones that give you the free cleaning, and the free exam, then they tell you that you need $3,000 worth of dental work.”

2.  A new dentist who prescribes more treatments than usual.

3. Replacing old fillings

4. Veneers.  These cash cows are almost always unnecessary and purely for cosmetic purposes, but they can make teeth problems worse in the long run.

5. Fluoride treatment or sealants for adults or special fluoride toothpaste.  Kids may be able to use fluoride treatments or sealants, but there is rarely any benefit for adults and sealants can actually weaken the teeth through the etching process.

6.  Dentists who don’t show you evidence of problems on your x-rays.  Of course, most dentists take way more x-rays than is healthy for their patients, but if they do take them and tell you that you have a problem, they should show you the problem on the x-ray and let you have a copy of the x-ray.  It is legally your property even though some dentists don’t like to let you see them.  As Stromberg wrote:

Virtually all honest dentists will gladly show you X-rays of your teeth that contain evidence of the work you need. “X-rays, legally, are your property. A dentist can charge for them, but they have to share them with you,” Mindy Weinman said.

You won’t necessarily be able to see evidence of every single type of problem in an X-ray, but many of them should be apparent. A dark spot or blemish, in general, corresponds to a cavity. And in general, the dentist should be willing and able to explain why you need certain procedures, both by using X-rays and other means.

But regardless of what the X-rays show, if you’re skeptical of the treatment a dentist is prescribing — especially if it’s your first visit to the practice, and they’re recommending far more work than you’re ever needed before — the best response is to get a second opinion. This was mentioned to me by every dentist I spoke with, along with the American Dental Association.

For more stories about creative diagnosis at dental offices, see Ferris Jabr’s excellent essay in The Atlantic.  At the same time as some Americans are getting excessive, unnecessary dental care, other Americans lack access because they are too poor or because they live in a rural area where dentists are simply not available.  Olga Khazan says that,

About a third of people in the U.S. don’t visit the dentist every year, and more than 800,000 annual ER visits arise from preventable dental problems. A fifth of Maryland residents have not visited a dentist in the past five years…  There are about 4,000 designated dentist shortage areas all over the U.S. In some of the worst-affected states, between a quarter and a third of the population lacks access to dental care entirely.

Posted in Health

Which space is more important for determining your wellbeing, work or home?


Most working adults in Western nations spend more waking hours at work than at home. Why do people spend so much time at work (and on long commutes) in order to spend as much as they can on large, ostentatious homes that they don’t spend much time enjoying and that they just want to get away from as soon as they can get a week or two of vacation?

Why don’t people spend more resources making their workplaces beautiful more like they spend at home?

Posted in Labor

The Lead Conspiracy

How much money would you require to be paid to voluntarily put yourself through lead poisoning that makes you sick without killing you? Some people would do it for a few million dollars. This helps explain why people lie and cheat in order to poison the world including themselves. After all, if you could earn millions of dollars for getting mildly poisoned and had no regard for the effects on others, would you do it? You could then afford to retire early and buy a property somewhere in a healthier environment along with the best medical care money can buy.

For example, Thomas Midgley patented Tetra-Ethyl Lead (TEL) as a gasoline additive. This was one of the worst environmental mistakes in history from a cost-benefit perspective. Other mistakes have been bigger like the effects of carbon on global warming, but other major mistakes also carried much larger flows of benefits. TEL was highly profitable because it was patented, but other alternatives worked equally well for most purposes, such as the simple, abundant, unpatentable ethyl alcohol.

In Midgely’s quest to promote TEL, he accidentally gave himself acute lead poisoning and had to convalesce for months in Florida. He gave himself lead poisoning in spite of the fact that he undoubtedly was well aware of the extreme toxcicity of TEL because it was common knowledge. In March 1922, Pierre du Pont, one of the heads of the Du Pont Corporation, wrote that TEL is “a colorless liquid of sweetish odor, very poisonous if absorbed through the skin, resulting in lead poisoning almost immediately.” That year, the US Surgeon General, H.S. Cumming, wrote Pierre to say, “since lead poisoning in human beings is of the cumulative type resulting frequently from the daily intake of minute quantities, it seems pertinent to inquire whether there might not be a decided health hazard associated with the extensive use of lead tetraethyl in engines.” That year a lab director with the US Public Health Service wrote that TEL was a “serious menace to public health” and that “several very serious cases of lead poisoning have resulted” among workers in the pilot production runs.

After the press learned about five deaths from lead poisoning at a TEL factory and symptoms of severe lead poisoning that afflicted over 80% of workers at the factory, Thomas Midgely, its inventor and a Vice President of the company, made a demonstration of rubbing it on his skin in front of reporters to fool them into thinking that it is nontoxic.

The celebrated engineer… who had only recently been forced to leave work to recover from lead poisoning, proposed to demonstrate that TEL was not dangerous in small quantities, by rubbing some of it on his hands. Midgley was fond of this exhibition and would repeat it elsewhere, washing his hands thoroughly in the fluid and drying them on his handkerchief. “‘I’m not taking any chance whatever,’ he said. ‘Nor would I take any chance doing that every day.'” The New York World cited unbelievable dispatches from Detroit claiming that Midgley “frequently bathed” in TEL to prove its safety to skeptics within the industry.

The above information comes from Jamie Lincoln Kitman’s masterful Secret History of Lead in which he details the masterful influence peddling of the TEL industry to cover up the dangers of lead and influence science and government regulators to keep up their profits. He writes that the results were deadly for the nation:

A 1985 EPA study estimated that as many as 5,000 Americans died annually from lead-related heart disease prior to the country’s lead phaseout… one can conservatively estimate that a total of about 68 million young children had toxic exposures to lead from gasoline from 1927 to 1987.

Lucas Reilly paints a vivid picture of what happened at Midgely’s factory that got the attention of the press and motivated him to put toxic TEL on his own hands (if it wasn’t just a sham act):

Walter Dymock didn’t mean to jump out his second-story bedroom window. He was queasy, not out of his mind. But on a mild October night in 1923, shortly after Dymock groggily tucked himself into bed, something within him snapped. Like a man possessed, Dymock rose, fumbled through the dark, opened his window, and leapt into his garden.

Hours later, a passerby discovered him lying in the dirt, still breathing. He was hurried to a hospital.

Dymock wasn’t alone. Many of his coworkers were acting erratically too. Take William McSweeney. One night that same week, he had arrived home feeling ill. By sunrise, he was thrashing at phantoms. His family rang the police for help—it would take four men to wrap him in a straitjacket. He’d join his co-worker William Kresge, who had mysteriously lost 22 pounds in four weeks, in the hospital.

A few miles away, Herbert Fuson was also losing his grip on reality. He’d be restrained in a straitjacket, too. The most troubling case, however, belonged to Ernest Oelgert. He had complained of delirium at work and was gripped by tremors and terrifying hallucinations. “Three coming at me at once!” he shrieked. But no one was there.

One day later, Oelgert was dead. Doctors examining his body observed strange beads of gas foaming from his tissue. The bubbles “continued to escape for hours after his death.”

“ODD GAS KILLS ONE, MAKES FOUR INSANE,” screamed The New York Times. The headlines kept coming as, one by one, the four other men died. Within a week, area hospitals held 36 more patients with similar symptoms.

All 41 patients shared one thing in common: They worked at a… refinery in Bayway, New Jersey, that produced tetraethyl lead, a gasoline additive that boosted the power of automobile engines. …Factory laborers joked about working in a “loony gas building.” When men were assigned to the tetraethyl lead floor, they’d tease each other with mock-solemn farewells and “undertaker jokes.”

They didn’t know that workers at another tetraethyl lead plant in Dayton, Ohio, had also gone mad. The Ohioans reported feeling insects wriggle over their skin. One said he saw “wallpaper converted into swarms of moving flies.” At least two [workers had previously] died there as well, and more than 60 others fell ill, but the newspapers never caught wind of it.

This time, the press pounced. Papers mused over what made the “loony gas” so deadly. One doctor postulated that the human body converts tetraethyl lead into alcohol, resulting in an overdose. An official for Standard Oil maintained the gas’s innocence: “These men probably went insane because they worked too hard,” he said.

One expert, however, saw past the speculation and spin. Brigadier General Amos O. Fries, the Chief of the Army Chemical Warfare Service, knew all about tetraethyl lead. The military had shortlisted it for gas warfare, he told the Times. The killer was obvious—it was the lead…

Lead makes humans sick because the body confuses it with calcium. The most abundant mineral in the human body, calcium helps oversee blood pressure, blood vessel function, muscle contractions, and cell growth. …In the brain, calcium ions bounce between neurons to help keep the synapses firing. But when the body absorbs lead, the toxic metal swoops in, replaces calcium, and starts doing these jobs terribly—if at all.

The consequences can be terrifying. Lead interferes… damaging DNA and killing neurons. Neurotransmitters, the chemical paperboys of the brain, stop delivering messages and start murdering nerve cells. …Lead poisoning is rarely caught in time. The heavy metal debilitates the mind so slowly that any impairment usually goes unnoticed until it’s too late.

Amazingly, the press never noticed the deaths and poisonings at the TEL plant in Dayton so that never came up as problematic for the industry. The companies who profited off of the patents and production of TEL gasoline included some of the largest in America: Standard Oil, General Motors, and DuPont. They funded research that gave the misleading impression that lead is environmentally benign. It was a masterful recovery from the PR disaster after word got out that they killed many of their own workers in Bayway, New Jersey.

Although scientists were well aware of lead’s extreme toxicity, the TEL industry funded research claiming that a high level of environmental lead was the natural state of the world. That was unquestioned until Claire Patterson devoted his life to studying lead. He discovered that lead levels in American bodies was 100 to 1000 times higher than it had been in ancient times and that the leaded gasoline industry had produced most of the problem.

His research was very expensive and he had been funded by some of the wealthiest institutions in the world: oil companies. However when he published research showing that these oil companies were poisoning the world by pumping tons of lead into the air out of the tailpipes of engines and refinery smokestacks, they weren’t happy.

This illustration comes from a graphic novella about Patterson’s story by Kevin Cannon and Michele Regenold. Their story about Patterson ends optimistically:

Whereas Patterson bravely fought off well-funded interest groups who tried to discredit him and is one of the most beneficial scientists you have never heard of, Thomas Midgely, was made wealthy by said interest groups and has been called the world’s deadliest inventor that you have never heard of for inventing both TEL and CFCs which nearly destroyed the ozone layer which protects life on earth.

In addition to directly making people sick and reducing IQ, lead poisoning also caused the crime wave of the 1970s-1990s which ended after we ended leaded gasoline.

Rick Nevin, Economist and housing consultant, and author of the book The Lucifer Curves: The Legacy of Lead Poisoning, found a relation between lead pollution and violent crime. According to Nevin, the delay between lead… poisoning, and violent crime increase is of around 20 years.

For the best written history of the science of how lead causes crime, see Kevin Drum’s 2013 essay and his brief 2018 update.  This documentary about the history of lead vividly shows the corruption.

Posted in Health, Public Finance

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