While were at it, can someone explain to this humble non-economist why is it that as food and energy get stripped from the “core” inflation (because it is sooo volatile, boohoo!) oil prices get factored in the GDP defla/infla-whatever?

Final word on this subject (for now). As previously noted, we are no longer calling the GDP Deflator by that misleading name; untill such time as the BLS models more accurately reflect reality, it shall be known as the GD Inflator. Here is a visual dep…

I imagine Wesbury is a nice guy, judging from his CNBC appearances.

I’m sorry, but he’s not making an argument to redefine GDP as you claim. If you read closely, you will see he explicitly did not do that. He only made the necessary adjustment to GDP that would be required in order to use a CPI type measure as the deflator with any sort of logical result.

And removing imported oil prices is not “an artificial suppression of inflation” if you’re trying to measure GDP inflation.

It’s not a question of being fooled. It’s a matter of understanding what he said.

Aside from that, most economies are heavy in services, and valuing services is notoriously difficult as there is no physical manufacture that is readily counted. The more “developed” a society and the more price leverage the service sector gets, the larger its share of the overall economy. Furthermore, with less centralized control of the economy, economic relationships become more intermediated, creating the appearance (and arguably reality) of more transactions between different entities that were previously internal transactions (e.g. in a vertically integrated company).

Having said that, everything left and right is being outsourced and offshored from “Western” nations, and the acclaim of “actual work” is ever declining in favor of “making an easy buck” (in part by taking middleman positions masquerading as a “service”).

we must be talking about 2 completely different things. i have no idea where you are getting your numbers from, but the american economy can’t be $35 trillion; GDP for the entire planet is only $65 trillion.

US GDP is less than $14 trillion.

further, the dominant sectors you speak of are weak as a percentage of GDP:

“Production of goods accounted for 19.8 percent of GDP: manufacturing—such as computers, autos, aircraft, machinery—12.1 percent; construction, 4.9 percent; oil and gas drilling and other mining, 1.9 percent; agriculture, less than 1 percent.”