Easier to win a Nobel Prize than get Senate approval
MIT economics professor Peter Diamond is one of three economists who have just won the Nobel Prize in Economics. The AP鈥檚 Louise Nordstrom and Karl Ritter note how it was easier for Diamond to get the Nobel than to get confirmed for the Federal Reserve Board (emphasis added):
President Barack Obama has nominated Diamond to become a member of the Federal Reserve. However, the Senate failed to approve his nomination before lawmakers left to campaign for the midterm congressional elections.
Senate Republicans have objected to what they see as Diamond鈥檚 limited experience in dissecting the inner workings of the national economy.
[Federal Reserve Chairman Ben] Bernanke was one of Diamond鈥檚 students at MIT. When Bernanke turned in his doctoral dissertation in 1979, one of the people he thanked was Diamond for being generous with his time and reading and discussing Bernanke鈥檚 work.
And what was the work that earned Diamond his Nobel? As the same AP story explains:
Two Americans and a British-Cypriot economist won the 2010 Nobel economics prize Monday for developing a theory that helps explain why many people can remain unemployed despite a large number of job vacancies鈥or their analysis of the obstacles that prevent buyers and sellers from efficiently pairing up in markets.
Diamond鈥nalyzed the foundations of so-called search markets鈥�
Diamond wrote a paper in the early 1980s that found that unemployment compensation can lead to better job matches. Workers 鈥渂ecome more selective in the jobs they accept鈥� because of the employment aid. And, that makes for better matches and increases efficiency, he found.
He told a Senate committee during his nomination hearing in July that a central theme of his research has been how the economy deals with risks that affect both individuals, and the entire economy.
鈥淚n all my central research areas, I have thought about and written about the risks in the economy and how markets and government can combine to make the economy function better for individuals,鈥� he said in that hearing.
Hmmm鈥�. perhaps what Senate Republicans really object to in Diamond鈥檚 nomination is that he doesn鈥檛 ascribe to the notion that unemployment compensation makes people lazy. As , the 鈥渓ack of experience鈥� argument is a bit hard to swallow given others who serve and have served on the Board.
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