BP: I have a quibble with Dr Joe Webb

Thankfully, Dr Joe Webb is back with his Monday morning post. I always look forward to it as he does the heavy lifting to make sense out of the silly statistics that is stuff of the business press blablabla. But this morning, I'm seeing a different spin on the stats he clarifies. And thus my quibbles. I don't think they rise to disagreements. It's just looking at the stuff from a slightly different perspective.

If you're interested, read the full post. It's definitely worth the click. Below are my quibbles.

Printing Industry News, Commentary & Analysis, Research from WhatTheyThink: "The education CPI, not in the table, is up at an annual rate of 10.3% since December. Medical and education costs increase at rates higher than general prices because government intervention in the natural forces that affect pricing keeps prices from falling, similar to the effect that lack of competition has on postal rates.

Yup!

The rise in medical costs also affects workers’ pay. Rising prices for health insurance and other benefits have been crowding out any potential increases in wages, causing real wages in the economy, and in our industry, to be stagnant in recent years.

Yup! But here comes the quibble part:

Ultimately, the culprit is the Federal Reserve's pumping up of the money supply without a rise in goods and services to balance their actions. The money supply should be the result of industrious activity, and changing it to create that activity ignores the needed effects of incentives and investment."

Yes, that's the ultimate cause. But, the proximate cause is that higher education lives in a monopoly market, protected by a Government that licenses the ability to sell certificates of education. Given that the certificate selling market is controlled by members of the certificate selling guild (Colleges), it only makes sense that prices keep going up, that accountability for results is missing and parents will mortgage everything in order to give their children the best chances for a good future.

As in education, so in health care. Unregulated competition in a state protected and funded oligopoly with no agreed upon accountability leads to higher costs and less efficiency. It worked for the Stationer's Guild in London in the 17th century. It still works the same way.

In the long run, the issue is the funny money supply created by central banks. But the new thing is the ability of private hedge funds to create a shadow banking system that has created more funny money than the Fed can. It's the old story, but with new non government players.

As for printing, Dr Joe correctly says that

Printing prices cannot rise because of the competition with digital media and shrinking corporate budgets, which mean that printing worker wages and printing company profits are squeezed.

My take is that Printing is in the middle of a nasty divorce from advertising. The most appropriate response is to take what's left on the table, figure out how to use the internet to increase the network intelligence of the print product and move to the greener pastures in education, health and government.