The Great Compuppance

○ For some billionaires used to having their own way, 2022 was a reckoning

- Max Chafkin

In late May, Elon Musk took a break from trying to get out of his purchase of Twitter Inc. to offer his view of the nation’s economic health. He predicted that the US was careening toward a recession. No worries for him, though. “This is actually a good thing,” he tweeted. “It has been raining money on fools for too long. Some bankruptcies need to happen.”

Musk is, somewhat infamously, frequently off-target when it comes to predictions, as anyone waiting for his years-late electric pickup truck or a ride in one of his nonexistent 600-miles-per-hour trains knows well. He’s also missed on topics such as epidemiology (in March 2020, Musk declared that Covid-19 cases were heading “close to zero”), personal finance (he embraced cryptocurrencies just before they crashed) and politics (he predicted a “massive red wave” for the midterm elections).

But Musk’s economic forecast turned out to be pretty solid. While there’s no recession, a slowdown has indeed exposed a number of entrepreneurs who, for the past decade, took advantage of low-interest rates, bubbles in tech and finance and a self-reinforcing media environment to convince themselves of their genius and then to profit from their hucksterism.