Monday, June 6, 2011

Nobel Laureate Peter Diamond Withdraws Nomination from Fed Board

MIT professor Peter Diamond withdrew his nomination from Federal Reserve Board today and wrote an op-ed in the NYT. Republicans blocked his nomination ostensibly because they thought he did not have enough expertise in monetary policy.

Peter Diamond's specialty is macroeconomics and the labor market. His Nobel Prize was for his research on search costs in the labor market. Monetary policy is intricately linked with unemployment. In fact, perhaps the primary purpose of monetary policy is to maximize the number of well-paid jobs in the American economy. I just finished reading the core of the macroeconomics textbook so now I really see just how integrated employment and monetary policy are. It would be like telling someone they don't know enough about current because their expertise is in measuring resistance.

It really seems like such a travesty that someone like Peter Diamond can't even get nominated. It really discredits the idea that the confirmation process is merit-based. Also, from seeing him talk, I really get the sense that he is really such a professional, not an activist or a partisan. I am embarrassed that he is treated this way.

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