Forget Summers and Yellen: Let a Bot Run the Federal Reserve


1956 - ”Forbidden Planet” - Robbie! by x-ray delta one, on Flickr
Creative Commons Attribution-Share Alike 2.0 Generic License  via  Flickr 

The shameless campaigning and cat fight over who should be our next Federal Reserve Chair has only served to underscore the inevitable human flaws and lack of omniscience of whoever is ultimately appointed, all while further politicizing and debasing the office. I argued four years ago a bot could do that job and feel obligated to make the case again. Other than changing the date, this still makes perfect sense:

Software Bot To Be Nominated Chairman of 
Federal Reserve System

Cutting edge technology tapped to bring stability and
consistency to monetary policy

WASHINGTON D.C. – August 25, 2009 — President Barack Obama today announced he intends to nominate Monet 3.0, a software bot, to become Chairman and a member of the Board of Governors of the Federal Reserve System. As Chairman, Monet will be charged with conducting the nation’s monetary policy by influencing money and credit conditions in the economy.

“Software bots today are successfully outperforming the world’s best human practitioners in complex endeavors like chess, and they do so without irrationality or exuberance,” said President Obama. “Despite the bot’s French-sounding name, I am confident that Monet 3.0’s discipline and transparency will bring price stability and foster the economic growth required for a full economic recovery.”

Monet was born in a lab at Stanford University in the early 1990s and is currently in version 3.0.  The software instantiates a modified version of the Taylor Rule.  Source code for Monet is available for broad inspection and reuse under the modified BSD license at

Monet’s nomination requires approval by the Senate and a bout of hyperinflation that makes the Hungarian episode of 1946 look modest.

I could update the proposal with a dash of Big Data and or integrate with the Bitcoin blockchain (we’ll leave pioneering on that front to Iceland), but I think the original idea still suffices. It is easy to make contemporary arguments for our bot (e.g. even a “headless” bot will be more user friendly than Larry Summers). All the bird-watching speculation about hawks and doves becomes irrelevant, as our bot will mindlessly execute a direct link between objectives and policy. And in these times of government fiscal constraint, beyond electricity and the occasional motherboard upgrade, moving to a bot will be cheaper than a new human occupant.

Making a bot the Fed chair will also help the broader Federal Reserve Board of Governors increase their understanding of important economic dynamics. Members of the Federal Reserve have not always demonstrated the greatest empathy for the consequences of their policy. Seeing a robot take a colleagues’ job firsthand should give them a deeper appreciation for the situation of the American worker.

Plus, the all-knowing NSA is already moving down this path to cut fickle and fallible humans out of the loop and the Federal Reserve, perhaps the only other government entity with comparable reach and influence, would not want to fall behind in the Race Against the Machine (a topic I will get to one of these days).

I will keep posting this every four years until a bot takes its rightful place as Chair of the Federal Reserve.

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