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Tesla's latest lackluster earnings report, which has caused the company's stock to tumble this morning, is bringing a new spotlight on the leadership of CEO Elon Musk, who oversaw the tech and auto company's profit fall 45% in the second quarter. With Musk embracing GOP politics that seemingly do not align with electric vehicle company goals, what does the future hold for the world's richest man? For more, we welcome in Nobel Prize winning economist and New York Times columnist, Paul Krugman, who has written on Musk, the economy, the election, and so much more. Paul, welcome to the show. So much to discuss with you today, but let's start on Musk because you wrote in 2022, quote, "Given what we've seen of Musk's behavior, I wouldn't trust him to feed my cat, let alone run a major corporation." Two questions for you there. One, has your opinion of Musk changed since that time? And two, just zooming out, what has made him such an alluring figure to begin with?

Okay, no my Well, I mean my opinion has changed in that um, it's a little bit worse. He's he's confirmed all the worst expectations. I mean he's he's well along that sort of conveyor belt from, you know, conservatism. I like my taxes low to full on QAnon type conspiracy theorist. So it's it's an amazing thing to watch someone who could you know, afford to finance a personal intelligence operation comparable to that of a medium-sized country instead buy into random uh bots uh tweeting conspiracy theories on on on his site. So that's really bad. Um, and uh, yeah, I mean what what can we say? It's pretty amazing to see him um, going this this far off the edge. And um, fundamentally, uh the you know, this the MAGA movement is hostile to what he made his name for. Uh on, I mean he he was what you know, whatever the allocation of credit, Musk pioneered um, electric vehicles in the United States, which is a big deal. He did some stuff on, you know, space technology that is is a big deal. So a lot of people really wanted to admire him. Uh, the trouble is uh, he's not behaving now like someone you can trust on anything.

And outside of just Tesla, he's also made headlines around the election. It's clear from his post on X that he uh approves of Donald Trump and that he supports Donald Trump as the next president. But it's interesting because Trump already already stated he would be rolling back some of those EV policies that Biden has put in place. So what do you think the play here is for Elon Musk and and what's behind his support of Trump?

Well, yeah. I mean what you watch. I There's I've spent quite a while and a lot of people even more trying to think about the psychology in general of tech billionaires. It's a very peculiar uh set of politics. It's not like if you look at sort of major Fortune 500 companies, their CEOs basically are trying to maximize profits for the shareholders, which is itself, you know, that's a question now whether that's a a great thing or not. Um, but when you talk about people who are individually enormously wealthy and made it to some extent by being contrarian and so on, they're not uh, they aren't all that rational in their political beliefs. Remember a lot of uh, people, to some extent Musk included, went gaga over RFK Jr., who is clearly a crank. And now they're it, I think this really is about Musk's personal hangups. It's the Trump administration would be really bad for Tesla's core business.

And Musk, it's interesting because he's not the only tech CEO to voice support for Trump. What role do you think Silicon Valley will have on the outcome of this election? And how will crypto factor into that support as well, given the Trump Pence ticket is very pro crypto, and we've seen entrepreneurs like Mark Cuban, for example, theorize about this?

Well crypto is certainly there's a lot of money involved. Um, but at least what I understand from the political scientists types is that there are diminishing returns to money. Uh that uh, you know, money matters. A campaign that doesn't have enough money to put a lot of stuff on the airways, to run an organization is in trouble. And you know, just before Joe Biden stepped aside, it looked as if the Democrats might be have have a real cash problem. Uh but with this huge outpouring since Harris uh became the you know, presumptive nominee, uh that's not going to be an issue. So we're at the point now, we're at the margin. Um billionaires don't matter, which must be intensely frustrating to them, of course. Uh, so I don't think that makes a big difference. Crypto, yeah. I mean it is a funny thing how crypto has become a a big player in political donations, um which in a way they have to be because they're an industry that hasn't got, you know, still doesn't have a use case except for money laundering. So it's all speculative stuff and it's uh so getting sympathetic politicians is pretty much all they got.