Nobel laureate Paul Krugman compares Tesla to bitcoin — and says he wouldn't trust Elon Musk to feed his cat

Krugman said he wouldn't trust Musk to take care of his cat because of hype and faith.

Between the start of 2020 and the peak of the stock, it skyrocketed more than 13 times. As of Tuesday's close, the electric-vehicle company's market cap was less than $350 billion.

In a New York Times column on Tuesday, Krugman asked if the story of the electric car maker made sense.

According to the economist, Apple, Microsoft, and other Big Tech companies are worth more because of their network effects. Microsoft Word and excel are the default choice for businesses as they're the most familiar and the industry standard, but Apple has an array of devices, apps, and services that are inconvenient for users to leave.

There are no clear network effects from owning a rival car versus a rival car, Krugman said. When the excitement around its products fades, how will the company be able to make large profits?

He said it was hard to see what a long-term lock on the electric vehicle business would look like.

The image of Musk as a "cool guy" has faded in recent weeks despite the economist's claims.

He pointed to the parallels between the hype and faith that fueled the stock price ofTesla and the rise of the leading criptocurrency, noting that it has no use beyond money-laundering and is being propped up by a hardcore group of true believers.

Krugman took a jab at Musk for his chaotic start at the social networking site. He bought the social-media company in October and since then has fired then rehired workers, launched then scrapped features, and suspended users.

Krugman said that he wouldn't trust Musk to feed his cat or run a corporation.

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