YOUGHAL, IRELAND – We begin today with a bold prediction: Elizabeth Warren will be our next president. (Biden’s candidacy died in the Ukraine.)

If the stock market collapses before the next election, she will win in 2020. If it doesn’t, she may have to wait until 2024.

We take no joy in this prediction. Ms. Warren is a pigheaded, sanctimonious know-it-all, with all the wrong ideas about how an economy functions.

In that regard, she is little different from Donald Trump. But Ms. Warren has “plans” for everything. And as we will see, they are all bad.

Sunny Side

But let’s cross over to the sunny side of the street, where science, technology, and innovation allegedly make our lives better, day by day.

As we saw on Friday, economists Gale Pooley and Marian Tupy figured out that prices for “50 foundational commodities” were generally falling – at least in terms of how much time at work it took the average person, worldwide, to buy them. This they followed up with startling insights.

For example, as we mentioned yesterday, they saw that the latest iPhone model is 120 times more powerful than the first model.

Though it may be twice as expensive… the real value to the consumer, they claim, is 60 times what it used to be ($500 back then versus a “comparable price” of $8.33 today). Or, in terms of “time price,” it is so much cheaper that “the time required to buy one iPhone in 2007 will buy almost 75 today.”

From these facts, Mr. Pooley and others conclude that the iPhone owner is 75 times richer than he was in 2007. He is certainly “richer” in handheld computing power.

He may be richer in other ways too. His entertainments, for example. Until recently, there was nothing like Game of Thrones on TV. And now, he can talk to a robot – Siri – and ask her to turn on the lights.

But this kind of richness is not exactly the kind you can take to the bank. Nor is it the kind of wealth that makes it easy to pay your debts… or justifies super-low interest rates.

Pooley disagrees. According to him, we are getting wealthier at such a rapid clip that we should be happy to lend our savings out at negative rates… because the money will be so much more valuable – in terms of the bushels of wheat or iPhone computing power that it will buy – when we get it back.

“Negative rates,” says he, “may be rational.”

We could test Mr. Pooley’s confidence by asking him directly: “Lend us $1 million. We’ll give you back $900,000 20 years from now. Cross our heart and hope to die. And think about how powerful the iPhone will be then!”

We doubt he would do it.

Moral Philosophers

There was a time, believe it or not, when economists wouldn’t presume to tell us what interest rates should be. They were “moral philosophers” who merely observed and tried to understand.

Then, they discovered the flimflam of “modern economics,” with its fame, fortune, formulae, data, statistics, math, and quack science. Now, they get paid big salaries for advising, directing, pontificating, and – in the case of the Federal Reserve – manipulating a $20 trillion economy.

John Maynard Keynes was probably the most famous of the new breed. He argued that the feds could use “countercyclical policy” to offset the natural ups and downs of a market economy.

As it turned out, the authorities were quick to counteract the downs… but reluctant to interfere with the ups, leaving a bias towards loose monetary and fiscal policies.

Not once since the Carter administration, for example, has the U.S. budget (fiscal policy) been in real surplus (not counting Social Security contributions). Not surprisingly, the eventual ups and downs are more dramatic than ever.

Paul A. Samuelson, whom we mentioned on Friday, attempted to make the profession more credible by adding more numbers and more rigor.

He won a Nobel Prize for his scientific approach and used it to forecast that the Soviet Union would overtake the U.S. “no later than 1997.”

Of course, the Soviets themselves were the great rationalizers. They decided that advertising, brand competition, and market prices were “irrational,” and that they could do better by allowing groups of bureaucrats to make the important decisions.

You know how that turned out; they reasoned their way into a 70-year catastrophe.

Modern Sages

Over the weekend, another sage of modern economics was in the news – Thomas Piketty. He gained fame with his 2013 book, Capital in the Twenty-First Century. In it, he maintained that capital always increases faster than the value of the worker’s time (“r > g”). The rich get richer, in other words.

In a new book, out in English next year, he tells us that we should do something about it – including taxing billionaires at a 90% rate. “There shouldn’t be any billionaires,” adds Bernie Sanders.

Ms. Warren – whose advisors are said to be working with Piketty – is paying attention too. She’s proposing a tax of 2% on fortunes over $50 million and 3% on fortunes over $1 billion. And don’t think you can escape. She’s proposing a stiff “exit tax” for anyone who tries to get away.

And coming up fast, in the ranks of the damned, is Modern Monetary Theory (MMT), a thoroughly rational guide to managing public-sector finances.

The MMT-ers say all money comes from the government. The feds can spend, spend, spend – they believe – until inflation shows up like barbarians outside the city walls. Then, they can raise taxes to sop up the excess money.

Totally logical… and absolutely bonkers.

Imagine an application of MMT during the medieval period: “Hey, we don’t have to worry about fixing the castle walls until we actually see the enemy coming.” But by then, it is too late.

Evil Afoot

In the 1960s, low levels of inflation were such a fact of life that Gardner Ackley, chairman of the Council of Economic Advisors, wrote his headline “Prospect of Avoiding Inflation Is Good” with full confidence.

Soon after, inflation made a fool of him.

Barely 10 years later, prices had doubled. In 1974, consumer prices were going up at a 12% rate. It took Paul Volcker and the worst recession since the Great Depression to bring inflation under control.

But who will raise rates to 20% in the next crisis? Who will bring inflation to heel? Who will raise taxes during a financial crisis?

Elizabeth Warren, that’s who. She will blame the “greedy rich,” and tax the hell out of them.

Yes, Dear Reader, there is evil afoot.

On the march are Donald Trump’s trade wars and his trillion-dollar deficits… Bernie Sanders’ $2.5 trillion “Housing for All” program… the Congressional Progressive Caucus’ plan for $2 trillion in infrastructure spending… Elizabeth Warren’s soak-the-rich taxes… and central banks’ next round of rate cuts and quantitative easing.

When the next crisis hits, no matter who is president, this mischief will come bounding over the walls, breaching the gates… setting fire to our roofs, looting our wealth, killing our young men, raping our women… and selling the rest of us into debt servitude.

But wait. Maybe technology will save us. More microchips in the F-150? More computing power in the iPhone 12? Cheaper wheat and steel? More hit shows? More bandwidth? Skinnier jeans? Uber? WeWork?

We wouldn’t count on it.