In Reply to: smells like a bubble posted by ClockBlocker on June 12, 2026 at 09:56:12
Funny you should say that, Clock.
Paul Krugman:
Yesterday I took a short trip. I began with a ride on the local Hyperloop, which ran through a tunnel dug by Boring Company. Then I used my neural implant to summon a fully self-driving Tesla robotaxi. While enroute I read the latest news from the Mars colony.OK, none of that actually happened, because those products don’t exist. There are no working Hyperloops. The Boring Company has not dug any commercial tunnels. Tesla has a few self-driving — though not fully self-driving — taxis in Austin and nowhere else. (Google’s Waymo driverless taxis are operational in several major hubs.) Neuralink, which is purportedly pioneering brain implants, has tested its products in a handful of patients but done no more than that. And of course there is no Mars colony: there have been no manned flights to Mars, nor the prospect of any for the foreseeable future.
Yet at various points over the past decade Elon Musk promised that each of these services would be available by 2025 if not sooner.
Granted, Musk has had some real successes. Tesla was ahead of the EV curve, and Starlink is a critically important service as well as a viable business.
But these achievements weren’t enough to make Musk the world’s richest man. His wealth has, instead, historically rested mainly on self-fulfilling faith — investors believing in Musk’s genius have piled into stocks in Musk-controlled companies, and the rising value of these companies has enhanced his reputation for genius.
We have a term for enterprises that look successful because they keep drawing in new investors and keep drawing in new investors because they look successful. They’re called Ponzi schemes. And Elon Musk is basically a human Ponzi scheme.
Furthermore, the SpaceX IPO now in progress makes it clearer than ever that Musk’s greatest skill isn’t developing futuristic products. It’s his mastery of financial shell games and his ability to leverage insider influence, especially his influence with the Trump administration.
. . . .
Which brings me to my final point. The immense human Ponzi scheme that is Elon Musk will eventually collapse. But traditional Ponzi schemes only exploit investors who choose to participate. 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. Approximately 52% of mutual fund assets are now invested in index or index-based funds, and over 50% of American households are invested in mutual funds. Thanks to the collusion between Musk and Wall Street, enabled by the perception that the Trump administration has Musk’s back, many if not most of these small investors will be dragged, willy-nilly, into fueling the Musk juggernaut.