Leaving a Diamond behind

LEAVING A DIAMOND BEHIND…. Before wrapping up the lame-duck session, the Senate confirmed quite a few pending nominees submitted by the Obama administration. Regrettably, Peter Diamond wasn’t among them.

The White House says President Obama will resubmit the nomination of a Nobel prize-winning economist to the Federal Reserve, even though he faces stronger opposition from the next Congress.

Peter Diamond’s nomination fizzled when the Senate adjourned Wednesday without acting on it.

Senate Republicans opposed the Massachusetts Institute of Technology professor’s nomination, questioning his qualifications for the job.

This is, of course, deeply foolish. Diamond, among the most accomplished economists of his generation, was blocked by one far-right senator, Alabama’s Richard Shelby (R). Even after Diamond won a Nobel Prize in economics, Shelby insisted the economist lacked the qualifications to join the board of governors of the Federal Reserve.

Let’s flesh this out a bit. 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 were not specialists in monetary economics. One of Bush’s appointees has no advanced degree in economics at all and has never done any academic research in the field.

What did Shelby have to say about this nominee? Nothing — he never raised questions about the nominee’s qualifications and didn’t hesitate to support the nomination.

Diamond’s expertise — the scholarship that produced a Nobel prize — is in understanding competing kinds of unemployment. Paul Krugman, himself a Nobel winner, noted a while back 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.”

But for reasons that defy comprehension, Shelby simply decided he didn’t like Diamond. After the nomination cleared committee and headed to the floor, Shelby could have registered his opposition by voting against Diamond, but that wasn’t good enough — the conservative insisted that the Nobel laureate is so offensive, the Senate shouldn’t be allowed to vote on the nominee at all.

Have I mentioned that this is no way to run a country?

The White House intends to try again with Diamond in 2011. I’m glad to hear it.