This year's Budget Statement, due next month, will likely contain tax increases. This is quite understandable, mathematically. Government spending is based on the days when the economy was fairly boiling along, and unlike the rest of us, Government can't turn on a dime or even slow down much. It can't fire people. It has a number of massive capital contracts under way that it will not interrupt just because it lacks the money. Governments don't have to: it's not their money.

Meanwhile, payroll tax receipts are falling, perhaps sharply, as the number of employed people working in Bermuda reduces. I would guess that receipts from the sale of houses are also down. Revenue from tourism is probably flat, or falling slightly. So Government is facing higher costs and a reducing income base.

Where the rest of us, in such circumstances, would be forced to trim our sails, to cut our cloth according to our circumstances, governments don't do that. Adding to the misery are a number of other agencies. The West End Development Corporation has decided not to offer winter discounts to its tenants for the first time in 15 years. BTC wants to increase its charges by 11.75 percent for the benefit of its shareholders. Electricity costs a staggering amount. My bet is that cable TV is about to become more expensive.

These increases are aimed at consolidating the position of these agencies and utilities. What's unfortunate is that all these price rises come at the worst possible time for the rest of us.

There are some things one can do, almost all of which include cutting back a little. TV is a luxury, as are cell phones, dining out, new clothes and almost everything other than rent, home-cooked meals and the bus to get to work. This crunch is going to last a while, and we haven't seen the worst of it yet. For generations, when the winds have blown, Bermudians have trimmed their sails. Now's the time to hunker down. Clearly, just about no one is on our side. We must develop our own survival skills.

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Cablevision's behaviour this week offers a chance to explain a basic tenet of economics without the usually associated gobbledegook. It is called "the inelasticity of demand".

A key assumption underlays Cablevision's decisions to turn off two of the three local channels the day after Mr. Obama's inauguration: that Bermudians will continue to watch and overpay for TV regardless of how badly their supplier treats them. You were following a soap opera? Too bad. You like watching Katie Couric deliver the news, or David Letterman's satire? Hard cheese. You think the customer matters? How quaint.

Were all of us to phone Cablevision, and wait forever to get through, in order to cancel our subscriptions, matters would be resolved in our favour in a heartbeat. But Cablevision knows that we won't do that. For one thing, switching TV suppliers is a difficult job. For another, there are other channels we can get used to. Our demand for TV will not be diminished by a reduction in the quality or quantity of the programming. Our demand is firm, regardless of the circumstances. Our demand is said, therefore, to be inelastic.

The more inelastic the demand for a product, the higher its price.

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The inauguration of President Obama was everything it had promised to be. These must be awful times to be a redneck: a skinny black guy as President, a brainy Jewish chief of staff and a feisty female Secretary of State. Imagine! There was only one moment of horror for the rest of us. It came when, right in the middle of the whole thing, Dianne Feinstein invited the audience to greet a singer. For a brief, awful moment, I thought it was going to be Bono, who is, when all is said and done, the true leader of the free world.

Then I remembered that Bono is now famous mostly for hiding his earnings in an offshore tax haven, so it was unlikely he would be part of the celebrations. Americans have gone off tax havens, even though it is US dollars that are most often hidden in them. Plus, the appalling Irish bighead is not American, although that hadn't stopped him prancing about on the Mall at the concert a couple of days before the inauguration. (Cablevision carried the concert free, as did all HBO providers, presumably because even Cablevision dare not deny us Bono, as opposed to less important programming, such as Bermuda's national news.)

No Bono at the inaugural, though. It was instead Aretha Franklin who did the warbling. She wasn't very good, but no matter: her headgear was the real triumph of the day. They should have inaugurated the hat: talk about the audacity of oversized headgear.

Almost ruining the entire proceedings, however, was the ignorance of the commentators on all channels (in the good old days, when we had all channels). For the record, "historic" means "significant"; "historical" means something that happened earlier. Thus, the inauguration was a historic moment, one for the historical record. And "momentarily" means "for a moment", not "in a moment". Thus, the commentator who said "the President will speak momentarily" didn't mean that. Mr. Obama spoke for 18 minutes, not for an instant.

Try to get it right, people. I don't want to have to tell you these things again.