MIT economist wins Nobel prize – Republicans block his confirmation to Federal Reserve Board of Governors

by Ben Hoffman

Republicans are doing everything they can to deride the Obama presidency, including blocking the best and the brightest from helping our economy recover. Here is the latest…

For months now, Sen. Richard Shelby has been blocking the nomination of economist Peter Diamond to join the board of the Federal Reserve. “I do not believe he’s ready to be a member of the Federal Reserve Board,” Shelby said, “I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job.”

Today, Diamond won the Nobel Prize in economics. Of course, Shelby never said he wasn’t a “skilled economist.” He said he didn’t know monetary economics. But that’s foolish: Before serving on the Federal Reserve Board, Elizabeth Duke worked at a bank. Kevin Warsh worked for George W. Bush. Sarah Bloom Raskin was a financial regulator in Maryland. Ben Bernanke was an economist, and prior to that, one of Diamond’s students. They all learned on the job.

And there’s really no other choice. You can’t serve on the Federal Reserve Board before you serve on the Federal Reserve Board. Shelby’s argument against Diamond is cover for his actual objections against Diamond. One of those objections is simple partisan politics. But another, I’ve heard, is odder: Shelby hates behavioral economics.

This White House, as has been endlessly well-known”>pointed out, is big on behavioral economics. See Peter Orszag, Jeff Liebman and Cass Sunstein for more on that. But the administration’s embrace of the discipline has provoked a response that the White House never anticipated. Republicans have grown suspicious of behavioral economics. And Diamond, it turns out, has done a fair amount of work in the field (for instance, here). Insofar as Shelby’s got an actual objection to DIamond, that’s it, and one of the things he wants is another hearing focusing on Diamond’s behavioral work.

Read more…

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7 Comments to “MIT economist wins Nobel prize – Republicans block his confirmation to Federal Reserve Board of Governors”

  1. Think I’ll just put my head in the toilet. We can’t govern ourselves anymore. Honestly.

  2. Well, the fact that he won the Nobel is no guarantee of his having a clue about what’s going on. Remember that Gore won the prize and everyone knows he’s a fool.

    • Of course – the fact that all those damn Dems keep winning the Nobel proves that Dems are idiots.

      Carter, Gore, Obama, this guy.

      Um, which Repubs have won????

  3. Moe, you make the point for me. Disasters all three.

  4. Moe, I was really poking fun at Al Gore. This guy may have been deserving. I don’t know. But he may also deserve to be opposed.

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