Krugman: Elon Musk Is a 'Human Ponzi Scheme'

It's been a big day for Elon Musk, or, as economist Paul Krugman calls him, the "human Ponzi scheme." In a Substack column, Krugman argues that the newly minted trillionaire's biggest product isn't cars, rockets, or AI—it's belief in Elon Musk. Krugman notes that many of Musk's splashiest promises (Hyperloop, mass-market brain implants, robotaxis everywhere, a Mars colony) remain either nonexistent or extremely limited, even as Musk has been vaulted to vast wealth. The throughline, he writes, is a pattern in which investor faith in Musk's vision props up sky-high valuations, which in turn reinforce the myth of his genius.

The danger here is that "the immense human Ponzi scheme that is Elon Musk will eventually collapse," writes Krugman. Typically, Ponzi schemes hurt only those who opted in. "This time much of the money propping up Musk's scam will come from ordinary Americans who have in effect been forced to buy in," he writes. Major stock indexes bent their own rules to include SpaceX immediately, and the result, Krugman warns, is that many Americans invested in index funds may end up involuntarily bankrolling Musk's risky empire. Read the full piece.