Tag Archives: Fake Press Releases

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 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.

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.

Press Releases We’d Like to See: Iceland Embraces the Bitcoin Economy

Continuing our series of monetary-themed press releases we’d like to see (but probably won’t):

Iceland Embraces the Bitcoin Economy
Unveils comprehensive program for
21st century financial leadership

REYKJAVIK, Iceland — May 1, 2013 — The Republic of Iceland today announced a comprehensive program to make Iceland the leading nation state in the emerging Bitcoin economy.

“Bitcoin is a math-based, digital currency that provides the foundation for addressing many of the financial challenges afflicting both the real economy and the digital economy today,” said Snorri Thorodinsónssónssónssónssón, Minister of Finance and Economic Affairs for the Republic of Iceland. “With our abundant, low-cost geothermal power and our formative experiences in the recent global financial crisis, no nation is better positioned than Iceland to help develop a new set of digital financial institutions the 21st century so desperately needs.”

Bitcoin’s many benefits – including cryptographically secure transactions, lower transaction costs, fraud mitigation, nearly instantaneous payments across the globe, transparent accounting and reduced dependence on “too big to fail” banks – make it the obvious foundation upon which to build a new financial system. As Iceland develops its digital economy powered by geothermal energy, a Bitcoin-based economy broadly benefits digital businesses hosted in Iceland, creates opportunities for new Bitcoin-based businesses and increases overall economic efficiency.

“Iceland intends to be at the vanguard of the new digital economy,” Thorodinsónssónssónssónssón continued. “While some may put their confidence in the resolve of policymakers, we put our confidence in the cryptographic assurance arising from the second preimage resistance of the SHA-256 hashing algorithm.”

The government’s comprehensive program includes:

  • Bitcoin Payments – Iceland will immediately accept Bitcoin as valid payment for all government transactions including taxes, customs, duties and other fees.
  • Government Finance – Iceland will sell the first Bitcoin-denominated government bonds and offer its citizens the option of Bitcoin-denominated assets in government pension plans.
  • Economic Development – in conjunction with the burgeoning data center industry in Iceland, the government will incentivize new Bitcoin-based businesses, including exchanges, mining operations and a new generation of financial institutions, to locate and grow in Iceland.
  • The Icelandic Bitcoin Furnace – the Icelandic government will sponsor the crowdsourced design of a custom, ASIC-based Bitcoin mining device for the home. The device will offer terahash-class mining performance along with highly efficient heat recirculation for the long Icelandic winters. The government has reserved significant 28nm semiconductor fabrication capacity for production of the final design, which will also be made available as an open source reference design.
  • Advisory Services – Iceland will make its expertise in Bitcoin available to other sovereign nations interested in joining the 21st century financial economy through a range of consultative services. These services will initially be available through Icelandic embassies in Athens, Dublin, Lisbon, Madrid, Nicosia, Paris, Singapore and Zurich.

No diacritical marks were harmed in the making of this post.

And if you are a Bitcoin-related (or other cryptocurrency) startup, whether you are in Iceland or not, I want to talk to you. See the About page for information on how to contact me.

Hoping for Change: Monetary Policy Edition

Platformonomics does not usually do monetary economics (except maybe the virtual kind), but I just happened to be thinking about the Federal Reserve yesterday (admit it, so were you…) shortly before the news broke of Bernanke’s renomination.  I was hoping for a more radical announcement:

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.