Nominating a Bot to the Federal Reserve Doesn’t Seem So Crazy Now Does It?

  via Flickr

I neglected to repost my quadrennial modest proposal to name a bot as chair of the Federal Reserve (instead of Bernanke or Yellen) during Jerome Powell’s nomination (I blame him). The idea is simple:

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 http://bot.federalreserve.gov.

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

The proposed nominations of Herman Cain and Stephen Moore to the Federal Reserve are an inflection point for this proposal. Now the traditional human approach looks radical and risky while the bot looks like a surer set of hands. To keep up the times we can upgrade the bot to a full-blown AI (it is just a relatively simple algorithm but we live in an era where you can’t spell ‘exaggeration’ without the letters A and I). And I’d be willing to settle for just an FOMC seat, not the chair (that can come later after the software has proven itself). But we need to act now before someone codes up the Burns bot, which is likely to suffer from memory leaks of an inflationary nature, and thus be preferred by debt-laden real estate developers and political hacks of all stripes.