RICHARD SHELBY, THE NOBEL COMMITTEE IS HOLDING ON LINE ONE…. President Obama sent three qualified nominees to the Senate several months ago to serve on the board of governors of the Federal Reserve. Two were confirmed after significant delays. The third, MIT’s Peter Diamond, was blocked by Senate Republicans.
It appears that the Nobel Prize committee was more impressed with Diamond than the GOP was.
The 2010 Nobel Memorial Prize in Economic Science was awarded on Monday to Peter A. Diamond, Dale T. Mortensen and Christopher A Pissarides for their work on markets where buyers and sellers have difficulty finding each other, in particular in labor markets.
For decades, the researchers have studied what happens when a market is not made up of identical, cookie-cutter units — as is true with the job market, where all workers have different skills and weakness. In many cases, there are significant search costs to finding the ideal match between a buyer and a seller of a good, like the job to a job-seeker.
Keep in mind, he appears to have been blocked by one conservative senator, Alabama’s Richard Shelby (R), who said Diamond, among the most accomplished economists of his generation, lacked the necessary qualifications for the Fed.
Diamond’s Nobel prize in economics makes Shelby look a little more ridiculous this morning.
The Alabaman has argued that Diamond’s background is not in monetary policy, which is true, but it’s hardly a prerequisite — of the five sitting Fed governors at the time of Diamond’s nomination, three are not specialists in monetary economics. One of Bush’s appointees has no advanced degree in economics and has never done any academic research in the field. Shelby never raised questions about his qualifications and didn’t hesitate to support that nomination.
Diamond’s expertise — the scholarship that produced a Nobel prize — is in understanding competing kinds of unemployment. Paul Krugman, himself a Nobel winner, recently noted that “there’s an ongoing dispute over what the rise in vacancies without a corresponding fall in unemployment means,” and as luck would have it, Diamond “pioneered the whole study of this subject.”
And yet, Republicans haven’t allowed Diamond to have an up-or-down vote. Here’s hoping the Nobel announcement can propel Diamond’s nomination in the lame-duck session.