Ask Archer: Does Two Plus Two Equal Five?

A reader asks: Does two plus two equal five?

Archer replies: It was the Russian writer Fyodor Dostoevsky who first observed that “The formula ‘two plus two makes five’ is not without its attractions.” It’s possible he was being whimsical, though lightheartedness is not a quality generally associated with Russian literature.

The idea was picked up many years later by George Orwell in 1984 as an example of “doublethink” – a test of the party’s insistence that its adherents (and everybody else) deny the reality observed with their own eyes.

We increasingly live in a world in which various actors insist that two plus two equals five (or maybe three). On trade, a recent Bloomberg headline had it that “Trump Ripping Up the Free Trade Playbook Comes with $1 Trillion Cost.” For his part, the president insists that the U.S. is “making a fortune” on tariffs.

Orwell notwithstanding, not everybody can be right on this. The data has been somewhat mixed so far, but for what it’s worth the theory class has been mainly gloomy. Nearly 2,000 economists and self-described “policy experts” have signed the “Anti-Tariff Declaration” sponsored by a gaggle of Nobel Prize-winning economists (and Phil Gramm) has garnered about 2,000 signatures from economists and self-styled “policy experts”

“America’s prosperity is today, as it has always been, rooted in principles of entrepreneurship and voluntary economic exchange,” they begin. Mostly true, though in fairness America has had tariffs before, especially in its infancy, though nothing like the current circumstance since Smoot met Hawley.

A BBC story took a look at Trump’s claim that his administration had seen $12 trillion in capital “practically committed” to the U.S. so far during his administration. Observers contacted by the news service were, to say the least, skeptical, suggesting that at the very least he has jumped to the front of a parade that was already well under way.

One of the wages of perpetual dishonesty is to have every statement met with some level of disbelief. That is where Trump has resided for much of his life. No reasonable person takes anything he says at face value.

A $499 iPhone-look-alike made in America? Anybody remember Trump University? (Hint: NBC News reported in February 2018 that “a federal court approved a $25 million settlement … with students who said they were duped by Donald Trump and his now-defunct Trump University, which promised to teach them the ‘secrets of success’ in the real estate industry.”)

Maybe one of the secrets was “first, inherent $400 million dollars from your father” (per a New York Times story).

Ninety trade deals in 90 days (Peter Navarro)? Here again, take the under.

As to that $12 trillion, separate data from the White House shows $5.3 trillion in investment for the same period. Looks like the author of The Idiot and other tales is moonlighting as a bookkeeper at the OMB.

Something similar has been going on with the tariffs. Trump says we’re collecting $2 billion a day; official figures show $113 billion through mid-July, or about $580 million a day. And neither tally takes into account the other side of the ledger – the impact of rising prices on consumers, the hit to GDP, the slowdown in global growth, the reputational damage.

But the stock market is watching and the data may be starting to catch up. Job growth is slowing, inflation rising again. The president’s solution: fire the head of the Bureau of Labor Statistics. That should do it.

And while we’re doing some math, consider the eroding value of the Trump “brand.” Maybe it was once worth something to a certain jejune demographic. More recently, not so much. Mother Jones, admittedly no friend of Trump, cited a NY Times story in writing that, “Condominiums in buildings with Trump’s name on them plummeted in value during the one-year period before and after the election, going from selling at a one percent premium compared to similar units to selling for four percent less.

“Over the 10-year period from 2013 to 2023, the contrast was even starker: the seven Manhattan buildings still emblazoned with the Trump name dropped in value by 23 percent, according to the real estate website CityRealty. Meanwhile, condos in four buildings that took down their Trump logos after hundreds of tenants signed petitions in support of the move shot up in value by nine percent during the same decade, compared to the eight percent increase the Manhattan market saw.”

Maybe Trump can steal a line from the Old Marx Brothers’ wheez and get paid for not putting his name on project (see Animal Crackers).

Woof!