Donald Trump 2.0 and the limits of CEO as president

Donald J Trump has officially become the 47th President of the United States (US).

- Kiertisak Toh and Prahlad Kasturi

An interesting feature of the Trump team is that many of his appointees are wealthy elites, billionaires, and multimillionaires from the business and financial world—all bound, among other things, to win Trump's trade war with tariff revisions. Given his successful experience on The Apprentice television show, Trump believes that governing a country is like running a corporation.

Should a President govern a country like a CEO running a big corporation? Paul Krugman, a winner of the Economics Nobel, argued in a Harvard Business Review article (1996) that a country is not a company, and business leaders need to understand the differences between economic policy on the national and international scale and business strategies on the organizational scale. Though related, economics and business are distinct disciplines requiring different mindsets, styles, and thinking skills. An executive thoroughly comfortable with corporate finances does not necessarily know how to read national income accounts, understand a country's trade balance and its balance of payments, or monetary or fiscal policy, and how they are related.

The economy, in contrast to a corporation, is the ultimate giant conglomerate, with hundreds of thousands of product lines and services united only by the fact of being within the country's borders. This complexity means that a national economy must be run based on general principles and theory. Best economic management almost always consists of creating a market-friendly environment based on a sound analytical framework. The idea rarely sits well with businesspeople, especially with know-it-all billionaires.