(Reuters) - Jeffrey Gundlach, the chief executive of DoubleLine Capital and Wall Street’s Bond King, called the increasingly popular Modern Monetary Theory backed by progressives a “crackpot” idea.

FILE PHOTO: Jeffrey Gundlach, CEO of DoubleLine Capital LP, presents during the 2018 Sohn Investment Conference in New York City, U.S., April 23, 2018. REUTERS/Brendan McDermid

Gundlach, who oversees more than $123 billion, said on an investor webcast on Tuesday that Modern Monetary Theory is “complete nonsense, yet it is being used to justify a massive socialist program.”

Modern monetary theorists argue government spending, and deficits as needed, should be used to meet the full employment and inflation mandates currently tasked to the U.S. Federal Reserve. Taxes may not be needed to support all spending since the government can create more money and inflation is the main restraint on government spending, according to the theory.

The ideas have gained currency with some economists and Democratic Party politicians but have also been met with fierce criticism.

A leading proponent of Modern Monetary Theory, State University of New York at Stony Brook economics professor Stephanie Kelton, advised democratic socialist U.S. Senator Bernie Sanders in his 2016 run for the Democratic presidential nomination, and Representative Alexandria Ocasio-Cortez has also expressed openness to the idea.

“What happens when the economy turns down?” he asked. Gundlach added that the “ridiculous” MMT is a way of monetizing debt and could lead to a significant boycott of long-term bonds. The ideas could gain popularity if the United States enters a recession in 2020, ahead of the next presidential election.

Populist discontent has struck a nerve with some voters in the United States, with liberals calling for higher taxes on the rich and more spending to promote economic equality.

Gundlach said the timing of a college bribery scandal reinforces that populist narrative.

Federal authorities arrested dozens on Tuesday for a $25 million scheme to help wealthy Americans, including actresses Felicity Huffman and Lori Loughlin and some finance executives, cheat their children’s way into elite universities, such as Yale and Stanford.

Gundlach said: “It really doesn’t do all of us in the world of finance a lot of reputational good...look at these people, turning the table in their favor. It’s really pretty horrifying.”

Gundlach said the college bribery scandal “really helps the Elizabeth Warren crowd.”

Warren vowed on Friday to break up Amazon.com Inc, Alphabet Inc’s Google and Facebook Inc if elected U.S. president to promote competition in the technology sector.

Addressing the run-up in the U.S. stock market, Gundlach said he still thinks stocks are in a bear market. “The stock market was and is in a bear market,” he said, adding stocks could go negative again this year.

Gundlach said the market rebound stemmed from the “remarkable 180-degree turn” from the Federal Reserve, which is straying away from quantitative tightening. He said the Fed will likely keep $3.5 trillion in assets on its balance sheet. “Maybe they realize that there really isn’t anybody to buy all the bonds that appear to be potentially in prospect other than the central bank,” Gundlach said.