Fed Nominee Blocked By GOP Senator As Unqualified Just Received The Nobel Prize

The Nobel Committee may think a lot about MIT economist Peter Diamond, but he is currently blocked as a nominee for the Board of Governors of the Federal Reserve. Sen. Richard Shelby has objected that Diamond is not qualified for the Board because his specialty is not in monetary policy.

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 labor markets and other markets where buyers and sellers have difficulty finding each other.

What is curious about the hold on Diamond’s nomination is that three of the five board members are not specialists in monetary economics and one of the Bush appointees did not even have an advanced economics degree.

Source: Washington Monthly

113 thoughts on “Fed Nominee Blocked By GOP Senator As Unqualified Just Received The Nobel Prize”

  1. Gyges:

    “If not the protection of the public, WHAT is the role of the government?”

    A referee for the public to have a rational standard to apply against the use of force or fraud by others. A legal system in other words and a military. I think government should be very limited in it’s scope and powers. The founders had a pretty good idea why not adhere to those documents, strictly. Obviously there are some contradictions among founding documents so don’t jump all over me for that. the 3/5ths rule comes readily to mind as do a couple of others like women not being allowed to vote.

  2. Buddha:

    Except unregulated self interest is what brought about 1929 and brought about the regulations that have been steadily eroded since Reagan.”

    Not hardly, there was regulation or have you forgotten the fed was almost 20 years old by that time. At this point in economics, a good many economists believe it was government intervention that caused the great depression.

  3. Gyges:

    If in my engineering scenario a consumer contacts say the company Your Local Engineer.com and chooses Joe Bleau. P. E. to do a design for their new addition and it falls down and injures Harry Homeowner, Harry has the ability to sue for damages in a court of law. Depending on how his contract is written with both YLE.com and J. Bleau, P.E. he is probably going to collect from one or both.

    The only function that government needs to concern itself with is the legal system. Harry is free to use any engineering vetting service he chooses, J. Bleau is free to choose any vetting service he wishes or maybe he chooses not to sign up with vetting service. The state doesn’t need to be involved in the licensing of engineers or of any professional occupation for that matter.

    Don’t you think rational people are able to understand their limitations? I don’t design 20 story buildings because I never have worked for a firm that does but my license says I can if I want to. I even had a conversation with a state employee and asked him what an engineering license allowed me to do, his answer whatever you think you can do. Pretty much the right answer but what is the states function? I am practicing under a self imposed restriction, they [state] don’t restrict my ability to design a 20 story structure and they would have no liability for issuing a P.E. certification in the event I did and it failed. The court system would take care of me.

    Personally I believe you would have a better quality of engineer in a system like that, the ones that truly sucked wouldn’t last long. And anyway that is sort of happening now with the Internet, you can get on line and find out about an engineer or doctor or lawyer and see testimonials. It’s really only a small step to my proposal.

  4. Buddha

    In case you missed it earlier, I can’t recommend Jay Lake’s “City Imperishable” novels enough.

    I’m pretty sure that Byron was just choosing his words poorly. He probably makes a difference between protecting from force and protection from other things.

    If I’m right I’m interested in his views on manslaughter and criminal negligence laws.

  5. Byron,

    “Self interest all around, in my opinion, prevents what you fear. I see government intrusion over the last 100 plus years as the problem.”

    Except unregulated self interest is what brought about 1929 and brought about the regulations that have been steadily eroded since Reagan.

    And I’m really looking forward to your answer to Gyges last question being that protecting the people is a primary function of government. If people didn’t need to be protected from one another, there would be no need for and no governments anywhere, now or throughout history. Really well run and formed governments look out for their people. Bad ones act like protection rackets, but that may not be due to bad form but rather bad actors within the government proper.

  6. Byron,

    So, how exactly do you get from the “government as a referee to prevent and punish force as a means of coercion.” to “I reject your premise that government is superior to the private sector in protecting the public?” If not the protection of the public, WHAT is the role of the government?

  7. It´s an interesting paradox. I don´t know a strategy of FED, but Peter Diamond presents one of the most successful economic experts from a particular point of view the labor market and the behavioral economics. He is the very brilliant scientist into own the branch. During his position as president of the American Economic Association in 2003 he brought out a lot of helpful advices and complex projects. Basically Peter Diamond´s fully researched into the study of unemployment. He wrote some useful scientific publications for these economical problems in todays times. The argument of FED is unsatisfiable for me. I don´t understand it.

  8. Gyges:

    I think I was making a counter point to your point, I see taxes as a reduction in freedom. You made the point that my ideas limited your freedom, I disagree. I probably could have left off the “I see you agree with me” part though.

    Why is the health department any better at protecting the public health than something like Angies list? Why do you argue from the premise that government is good and kind?

    As an engineer I can attest to the fact that state regulatory boards have the barest minimum of standards, why not have a free market clearing house that vets engineers? Or have 10 of them or 100 so a consumer can actually see who is good and who isn’t based on consumer testimony, education, and a particular test given? Any engineer worth his salt would want to take the best test that gives the highest rating and with it the highest compensation (presumably).

    I reject your premise that government is superior to the private sector in protecting the public, especially in light of the Internet and a more enlightened citizenry. Self interest all around, in my opinion, prevents what you fear. I see government intrusion over the last 100 plus years as the problem.

  9. Byron,

    No what makes it intellectually dishonest is the fact that the statement “The government is stealing my freedom by making me pay taxes” is a phrase designed to stop all thought about the topic of our conversation. It makes the question mark at the end of your sentence a lie. You were scoring a point, not asking my opinion.

    Don’t believe me? Did you respond to my counter argument, that you should pay taxes because it’s a cost of living in a society? Or did you fixate on me calling you on your bumper sticker slogan?

    Sorry if I’m a bit testy, but I was enjoying the thoughtful conversation with you until that bit. Also, I was going to make Chilisky for dinner (my venison\antelope chili) and found out I needed to re-season my cast dutch oven first.

  10. Gyges:

    I am sorry but it is not intellectually dishonest. There are plenty of people who believe a completely free market in all areas is both beneficial to society and moral in regard to the individual citizen. Granted government should take care of what it is constitutionally responsible for, common defense, etc.

    That you and others don’t think so does not make me intellectually dishonest.

    I don’t want to live in, nor do I want my children to live in a third world country. We have been headed that way for many decades, it is time to turn the leviathan around and move in another direction. The path we are on is a dead end in my opinion.

  11. Byron,

    You seemed to have missed the “Everybody” part of why the government should supply something. Private companies only go where they can make a profit. While there are companies that no doubt build better roads, have better schools, etc. they have no reason to do so where they won’t make money doing it.

    You participate in the society, so you have to pay the usage fee, taxes. So quit acting like the government is stealing your money. You can complain that they’re taking too much, or using it on things you don’t like, that’s fine. The revolution was in part about having a say in how taxes are spent after all (no taxation without representation and all that jazz). Saying “The government is stealing my freedom because they make me pay for stuff,” is just intellectually dishonest whining, and quite frankly beneath you.

  12. Gyges:

    here is a good article on my points:


    “Samsung of South Korea supplied a cellphone that has its own projector. Jeffrey Gabbay, the founder of Cupron Inc. in Richmond, Va., supplied socks made with copper fiber that consumed foot bacteria, and minimized odor and infection.

    Chile’s health minister, Jaime Manalich, said, “I never realized that kind of thing actually existed.”

    The profit = innovation dynamic was everywhere at the mine rescue site.
    That’s right. In an open economy, you will never know what is out there on the leading developmental edge of this or that industry. But the reality behind the miracles is the same: Someone innovates something useful, makes money from it, and re-innovates, or someone else trumps their innovation. Most of the time, no one notices. All it does is create jobs, wealth and well-being. But without this system running in the background, without the year-over-year progress embedded in these capitalist innovations, those trapped miners would be dead.”

  13. The readers of this blog are informed and understand what is going on, but most of the public is being swayed to believe that the Obama administration can’ get anything done and the blame goes straight to the President. As obnoxious as many of the obstructionist are, they are winning the popularity contest. We will see if that carries over at the polls.

  14. Gyges:

    We certainly do have a mixed economy.

    I think a free market can do all of the things you mentioned above and more efficiently. I can ask the same of why you think the things you mentioned are done “better” by government. What do you mean by better? Are more people helped? Just because 100 people do something doesn’t make it right.

    “However, your freedom doesn’t extend to actions that limit my freedom.”

    I see we are in agreement, so why should I pay taxes? By taking my money you have limited my freedom.

  15. Byron,

    Nope, I’m asking you what you mean by “Better”. It’s a perfectly reasonable question.

    You could give any or all of the factors you listed, or something you didn’t and I’d be happy (although then somebody might ask you to prove it), I’m really just trying to get a handle on the basis of your thinking.

    To show I’m playing fair:

    I advocate a mixed economy because I feel the market is a means to an end. As you say, freedom includes the freedom to enjoy the fruits of your labor, and the free market places the least limitations on how you use those fruits. However, your freedom doesn’t extend to actions that limit my freedom. So anti-monopoly laws. Nor does it allow you to commit fraud or take actions that can reasonably be assumed to harm others…
    So financial regulation, so licensing of certain professions, so food safety standards, etc. There are some goods and services that it is in the public interest for EVERYBODY to pay for and have thereby have the same access to and the only way to make sure that that happens is government programs, public roads, schools, libraries, hospitals, police forces, etc.

    So, you get a mixed economy (which sounds amazingly like what we and every other democratic first world country on earth has).

  16. Gyges:

    so what standard do you want to measure? Wealth creation as you mentioned or allocation of resources or creating stability, or social harmony or justice or individual liberty or morality?

    What do you want to measure?

  17. Byron,

    I mean what are measuring “better” by.

    If I say “this steak is better” I could mean it has a better flavor, or it could be more tender, or it could not be covered in maggots.

    Better isn’t all that descriptive.

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