[ExI] Elon Musk, Human Ponzi Scheme

Sun Jun 28 12:01:23 UTC 2026

I'm still safe from SpaceX co-ownership, as are a lot of people.

On Sun, Jun 28, 2026, 7:32 AM John Clark via extropy-chat <
extropy-chat at lists.extropy.org> wrote:

> *Nobel prize winning economist Paul Krugman thinks Elon Musk used a Ponzi
> Scheme to become the world's first trillionaire:*
>
> *===*
>
> *With Wall Street’s help, you’re about to be forced to buy stock in SpaceX*
> By Paul Krugman <https://substack.com/@paulkrugman>
>
>
> "Yesterday I took a short trip. I began with a ride on the local
> Hyperloop, which ran through a tunnel dug by the 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
> <https://substack.com/redirect/29b73d11-7cff-49b1-ab31-12e0e72522d7?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o>,
> 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
> <https://substack.com/redirect/46305120-7c1d-4d77-9655-dccbf1263b84?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o> 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.
>
> To see what I mean, consider Musk’s 2022 purchase of Twitter, which he
> renamed X. To finance the deal, investment banks lent Musk $13 billion
> <https://substack.com/redirect/29b38c5b-186a-4f94-a90a-4ad8f1bb5cb0?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o>,
> debt they planned to quickly move off their books by selling it on to
> investors. But Musk proceeded to destroy X’s business model by turning it
> into an extreme-right, Nazi-friendly cesspool, prompting advertisers to
> flee. By the summer of 2024, X was valued at less than half of its purchase
> price. Faced with losses of 40 cents on the dollar if they sold the debt,
> his bankers were forced to hold the Twitter debt far longer than
> anticipated, prompting the August 2024 Wall Street Journal headline: “Elon
> Musk’s Twitter Takeover Is Now the Worst Buyout for Banks Since the
> Financial Crisis”.
>
> But then two things happened that bailed out the banks along with Musk’s
> future creditworthiness: the 2024 election of Donald Trump and the advent
> of AI. After Trump’s election, advertisers began returning to X
> <https://substack.com/redirect/911c4a23-d1a0-480c-8fa5-9ed5dff12fa3?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o>,
> citing a need to appease Musk and Trump. And in March 2025, Musk merged his
> newly-founded AI company xAI with X, playing off the accelerating AI buzz
> to further prop up X’s valuation and his own personal balance sheet.
>
> Unfortunately for Musk, xAI’s Grok is, by all accounts, much inferior
> <https://substack.com/redirect/aa293e13-9b17-4c7e-9e60-8e2339ca8e98?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o> to
> the AI models offered by Anthropic and OpenAI. It’s also widely considered unsafe
> and unreliable
> <https://substack.com/redirect/551e7edb-bad1-419c-96c0-b87a1a383829?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o>.
> At one point it began spewing racist and antisemitic comments, dubbing
> itself MechaHitler
> <https://substack.com/redirect/355cafbd-5b5b-44c8-88cd-3aaa5525758c?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o>.
> Trump administration officials have pushed government agencies — including
> the Pentagon — to use Grok, but with little success.
>
> So Musk, having bailed out X by rolling it into xAI, is now bailing out
> xAI by rolling it into SpaceX, which has a genuinely successful business in
> Starlink.
>
> And today SpaceX is going public. Its initial public offering (IPO) debuts
> today on the Nasdaq at a price that implies a $1.77 trillion valuation for
> a company that had revenues of only $18.7 billion
> <https://substack.com/redirect/16cbfc8b-85c9-4f1a-8491-9e5ba567ea93?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o> last
> year and lost money.
>
> How can this, um, astronomical valuation be justified? The IPO is premised
> partly on the assumption that retail investors will buy in, not because
> they have made any rational assessment of SpaceX as a business, but because
> they believe that they are buying stakes in Elon Musk’s genius.
>
> But the ranks of the faithful may not be enough to keep the shell game
> going. So Musk’s Wall Street allies are also rigging the game. Some of the
> major stock indexes, notably the Nasdaq 100 and FTSE Russell, have recently
> changed their rules in order to admit SpaceX
> <https://substack.com/redirect/c5ae56ac-ccd4-440d-8ab7-1d30756d5873?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o> almost
> immediately.
>
> It’s important to understand that the inclusion of a company’s shares in a
> major stock index carries enormous financial rewards. A large share of
> stocks is held in “index funds,” mutual funds that hold portfolios designed
> to mimic the behavior of major indexes. Thus there is an immediate demand
> for the shares of a company when its shares are added to a major index
> because index funds must now add them to their portfolios.
>
> Historically, the major indexes have waited at least a year after a
> company’s IPO before considering its inclusion in their market measures, to
> give the stock time to “mature”. The bending of the rules for SpaceX shows
> that Musk is again exerting his ability to co-opt and corrupt key
> institutions. (Notably, the S&P 500 has resisted the pressure and will wait
> a year before including SpaceX.)
>
> 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
> <https://substack.com/redirect/c17d6ebe-f9c7-4d16-b8e8-114f77f08e20?j=eyJ1IjoiNngzbm4ifQ.I1PMvYo4mI3PquTDRhL5Dev-9_ouIq3kw6ZhrVNsy8o> 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.
>
> Should anyone in Trump’s America be surprised?"
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