Freelance rates and former police uniforms

A couple of years ago, an art director friend of mine and I went freelancing to an agency (where we had done some work a year earlier). The traffic person, who was there on our previous stint saw us, found out how much we were charging (which was a hundred dollars more if I remember right) and promptly told the CD. Next thing we knew, the CD was in our room asking how come we were charging more than 'last time' as the traffic person said. 
To which my art director said very succinctly, 'Last time police wear half pants'. Brilliant, I thought. Shut them up for good.
Which brings me to: why do people think freelancers should charge the same fee they did 5 years ago? Doesn't the rising standard of living not affect us? Are freelancers impervious to inflation and the effects of a floundering economy? It's not like we get the freelancer discount wherever we go. 
You: I'd like to buy a pair of jeans.
Salesperson: That'll be $350.
You: But I'm a freelancer.
Salesperson: Oh, why didn't you say that earlier? It's $25 for you. Can I throw in an Armani suit for an additional $18?
Doesn't happen, does it? When the regular staff on payroll get their CPF, bonus, salary increment every year, why can't the freelancer increase his or her rate accordingly? In a related vein, here's post I did on Picasso and Freelancing a while ago where I raised the point of experience and quality costing money (read here: http://www.guruswriting.com/gurus-blogging/category/picasso). 
The other thing that makes me laugh is 'do you have a package?' 
I'm always tempted to say, 'Yes, I do, would you be interested in a 3D/4N package? No airport pick-up. And just pay what your grandfather did in 1940. And don't forget your half pants.'