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Elon Musk's massive ego explains why he doubts government data and believes a recession is underway, Nobel laureate Paul Krugman says

By Theron Mohamed,

Elon Musk. REUTERS/Hannibal Hanschke
  • Elon Musk is a "recession truther" who buys into conspiracies because of his ego, Paul Krugman says.
  • The Tesla CEO has questioned official economic stats and boasted about his unique access to data.
  • Musk and other tech leaders think they're geniuses so they're happy to doubt experts, Krugman says.

Elon Musk is a "recession truther" who falls for false conspiracies because of his massive ego, Paul Krugman says.

Musk, the owner of Twitter and CEO of Tesla and SpaceX, warned in December of a severe, imminent economic downturn lasting about 18 months. "Mild recession is already here," he tweeted in April this year. "Further rate hikes will trigger serious recession. Mark my words."

However, as Krugman notes in his latest New York Times column, official data show the US economy is still growing. The unemployment rate hasn't jumped either, spurring Musk to reply to a June tweet alleging the government is publishing fake numbers with the words: "Something doesn't add up."

Krugman's theory for why Musk and other tech executives are dismissing government statistics and stubbornly sounding the recession alarm? Their phenomenal success has made them think they're smarter than they actually are.

"Technology billionaires are especially susceptible to the belief that they're uniquely brilliant, able to instantly master any subject, from Covid to the war in Ukraine," he said. "Their belief in their own genius makes them highly gullible, easy marks for grifters claiming that the experts are all wrong."

Indeed, Musk has boasted about his virtually unmatched volume of knowledge. "Between Tesla, Starlink & Twitter, I may have more real-time global economic data in one head than anyone ever," he tweeted in April.

Krugman, a Nobel Prize-winning economist, ruled out the possibility that the Biden administration is fiddling with its figures. He noted that US statistical agencies are largely run by civil servants, who value their integrity and would blow the whistle if political appointees tried to interfere with their work. Moreover, economic readings from private-sector groups have consistently been in line with the government's data, he said.

The columnist acknowledged a recession could eventually strike, but he firmly dismissed the idea that one is already underway. Musk and his peers are skeptical of that reality because "they don't know what they don't know, and nobody is in a position to enlighten them," he said.

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