i've been looking at a new computer for about 9 months now, almost bought a netbook several times, but $350 on underpowered garbage vs. $400 on something actually powerful? hm...

Exactly what prices have fallen? All I see around here are prices going up, up, and up some more.

I guess it's only the non-essentials that are dropping.

I would add to this a lack of civics. Most kids have no idea how the government works, and are disinclined to care.

LOL++! :)

This is just an example, you have to train yourself not to buy everything that's on sale just because its on sale. A sale isn't necessarily a good deal. You have to consider the product, get the after-percent offs price and then decide if the product is worth that price to you.

However even with the scammy clothing sales, I am still paying less for clothing than I did a few years ago and it doesn't seem like the quality has gone down either.

I have been chipping away at it slowly but steadily for about 6 months now and probably have a couple of years to go before it's completely gone. The point is that somewhere in all of this a light went on in my head, things needed to change. I completely cut out any impulse purchases by applying the 'wait a week and see if you still want it' rule. I know now that it is okay to tell people that you can't attend some family event (funeral's generally being the exception) and I try to plan ahead for anything else that might come up.

As you said, hopefully everyone learns one way or another about managing their finances responsibly. Let's hope that for most, this can come in the form of advice from parents or even better, a mandatory class for all high school seniors. Falling on one's face is also very effective, but has some nasty side effects.

@shepd: Maybe Bob actually said "your" and they transcribed it correctly.

I can only hope that the people who were spending out of hand and now have to cut back will try to keep their new habits after things have stabilized.

@sponica: due several condos being vacant with lower rents I was able to get my rent down $75 and I was happy, $300 would have blown my mind

that is almost a 30% increase in a MONTH!

Well, you have to buy food. They know that, so food isn't as vulnerable to market conditions as a TV, which you can live without.

Good bargains in cars right now, for those who have the cash. I've seen 3 year old low-mileage Acura TL's going for 11 grand. Helluva buy.

I've said for more than a decade that a credit based economy could not be sustained, despite W and Clinton claiming the economy was growing. I knew I was right, but I wish I had been wrong.

Seriously, the utilities here in the Midwest just asked for 8-18% rate hikes on electricity and food isn't down a dime. I'm sick of hearing about deflation, it's hogwash.

To be fair though, food prices have come down a bit in my area on some essentials. Milk is now 1.99 everywhere and it was over 3$ for a period of time last year (or was it the year before, I cannot remember). Last year at easter I paid 1.79 a dozen for large eggs with no sales in sight at any store, but now the same dozen of large eggs costs .99 and sales for .79 are common. Cereal is up but generic cereals are 1.99 a box on a routine easy-to-find basis. These haven't been shrunk either. There haven't been any spikes in the price of commonly used meat at least from what I can see. I think a pound of yummy store-brand ham from the deli is actually down a bit from this same time last year.

I am also paying less for clothes than any other year, as no one is buying and everything gets shifted to the clearance racks very fast. Yes MSRP clothes prices have gone up, however NO ONE pays full price for clothing, no one. However I am still paying less, there have been years in the past when I could not find one suitable pair of jeans for under 20$, but this year I ran into more 6$ pairs of jeans then I could use and had to choose wisely.

@rdm:

At least $70? Let me move to where you are. Most tix for big shows in New York City _start_ at $80 and go up from there.

@Real Cheese Flavor:

Well, our entire economy is based on people buying what they don't "need" - we've covered food and basic shelter a long time ago. The issue is more people buying what they can't _afford_, and taking on unsustainable levels of leverage to do it.

Core CPI is up. For my money it's time to stop worrying about deflation and start worrying about inflation. And since the inflation-causing liquidity hasn't been enough to stimulate job creation or industry, I'm not exactly sanguine on our prospects.

"Meanwhile, prices excluding food and energy, the so-called core CPI, rose 0.3% in April, after a 0.2% rise the month before. Economists were expecting a 0.2% gain. Core consumer prices were up 1.9% on an annual basis.

The increase in core CPI was due to a 9.3% rise in prices for tobacco and smoking products, which jumped 11% in March. Retailers have boosted tobacco prices in response to a federal tax hike that went into effect April 1.

Excluding tobacco prices, core inflation rose 0.2% in April, according to Aaron Smith, senior economist at Moody's Economy.com."

This basically says that if you exclude food and energy prices, both of which were very high last year due to the oil bubble, prices are actually up 1.9% over last year. The bulk of that was because of a rise in tobacco products, and if you exclude the tobacco price increase, they are still up 0.2% from last year.

Prices aren't falling. At least, the prices that matter to the economy aren't. And prices that have fallen, Energy and Food, would actually HELP consumers do more discretionary spending, thereby creating jobs.

If anything, the high prices last year were caused by a self-sustaining fallacy: "Wow! Consumer spending is up! Let's invest in oil!" People are now paying more for oil, which drives up the amount of money that people were spending so..."Wow! Consumers are spending even more! Let's invest in oil!". Eventually, people are spending all their money on oil, energy and food.

So, despite the fact that we've been in a recession, people were spending more money on energy, which was hiding the fact that we were in a recession for most of 2008. Eventually the self-sustaining fallacy must break when there is no more money to spend on oil...hence the fall of the price of oil.

That's because the gov't cut energy, food and housing out of the inflation index. Couldn't hide the actual inflation numbers any other way.

Honestly I have not seen much in the way of lower prices on other categories of tangible purchases either.

"When oil prices go up to near $150 and then fall sharply, your going to have an impact on CPI," said Bob Brusca, an economist at FAO Economics in New York.

Copyediting, FTL.

The market will correct itself.

It doesn't matter how much people(ie: government/wall street peon's) try to F*** with it...it's going to self correct.

I still don't see these supposedly 'lower' prices when I go out and buy something. Gas has just shot up again, food is still expensive, where are these fabulous low prices? As others have said, probably on stuff I don't buy, like consumer electronics.

@Quake 'n' Shake: Effectively, yes. The accessibility of credit "hyperinflated" the economy and now we're at the crash. It was overdue.

@Quake 'n' Shake: And that the era of buying crap is seemingly over for now. (Should have added that too)

Am I wrong in assuming that our economic growth these past 15-20 years has been fueled largely by people buying crap that they really don't need?