it's so depressing... sorry, recessing.

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I can't really offer a full explanation, but here's a start..

the cost of living that you speak of is usually based on things you Need to live. Gasoline, food, etc. these goods are income and price inelastic. that means, it doesnt matter if you get a raise or get demoted or if the price is $7 or $17, you're probably going to end up buying about the same amount of that good. this means, that as the cost of production goes up and companies are making less and less profits, the ones that can are going to charge more to cover their asses and people will still generally pay it. I believe (but dont quote me on this one) that phone and internet services are now getting to be about that inelastic for Americans. We just can't live life normally without them. So, prices are going up to keep businesses in business, and because you'll still pretty much have to buy them anyway. notice that the costs of jewelry, consumer electronics and movie theatres arent increasing much right now. thats because nobody tight on cash is going to buy them anyway, but Nobody will if they raise the prices much higher. anyway, thats my two cents

good luck with the recessionista. Sounds hip!
well i don't know about the microeconomics of it, but day one of the recessionista thing is a success: buying one sale item from anthropologie per paycheck = looking like "what recession?" in no time at all! ;)

HA, anthropologie. i witnessed you buying something there the other week, if you'll remember. and you looked pretty darn rad, despite the recession, fi i remember correctly. i bought jeans from old navy is july and they've already worn out...because i was too cheap to buy another pair. oh, woe is me.

ha! i haven't been online in forever as you might notice! blame the recession! but it was super fun running in to you too! and jeans from old navy are an excellent recessionista move, even if they do wear out. at least you're paying for your jeans a little at a time?

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Ernie

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Ernie
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the discoveries of ME, a Reformed Hermit and Social Tard

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