One of the great truisms about economics is that people assume CEOs have a deep understanding of economics when in fact most evidence suggests they don’t. This isn’t just the general and often true fact that people think captains of industry type CEOs are smarter than they really are. It’s more specific: what’s good for an economy isn’t just not identical to what is good for a company. Often they’re precisely opposite. You really don’t need to do anything more than actually read Adam Smith to know this. (You could actually argue it’s one of his central points.) And the point I’m making here is one that is almost a commonplace in policy circles if not on TV stock market news. I note it here because it’s possible, frighteningly possible, that we’re in the midst of a real world illustration of this reality, maybe one of the biggest or even the first.
