Nobel Prize may not help US president's Fed nominee
WASHINGTON - You'd think that having a Nobel Prize under your belt would be a clincher for getting a promotion or a job change. But it may not help economist Peter Diamond win a coveted seat on the US Federal Reserve.
Diamond, a professor at the Massachusetts Institute of Technology, won a Nobel Prize in economics with two other economists, American Dale Mortensen and British-Cypriot Christopher Pissarides, on Monday.
But Senate Republicans have so far blocked his nomination.
Why? They suggest he lacks the experience to serve on the Fed's board of governors.
Given the partisan rancor that permeates US politics these days, and Republican disdain for some recent Nobel awards, the news from Stockholm won't necessarily lead to a confirmation nod for Diamond.
"While the Nobel Prize for economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the Board of Governors," said Sen Richard Shelby of Alabama, the senior Republican on the Senate Banking Committee.
Diamond and the two other economists won the prize for their insights into unemployment and the impact of government policies on helping people to find jobs or cushioning their periods of joblessness.
That's certainly a prime topic right now with the US jobless rate stuck at 9.6 percent and nearly 15 million Americans out of work from the worst recession since the Great Depression of the 1930s.
Their research found, in part, that programs such as government unemployment benefits can help the process of lining up job seekers with jobs that match their skills and abilities.
"How can economic policy affect unemployment? This year's laureates have developed a theory that can be used to answer these questions," the Royal Swedish Academy of Sciences said in a statement.
Republicans in this election cycle have railed against the administration's spending, suggesting the tens of billions of dollars in bank and auto bailouts and stimulus programs have done little to produce jobs. Many have fought extensions of unemployment benefit programs pushed by President Barack Obama and the Democratic-controlled Congress, arguing that the extensions have reduced incentives for finding work.
Some of Diamond's research findings may run afoul of Republican campaign dogma.
Diamond, 70, widely considered a world expert on labor analysis, once taught Fed Chairman Ben Bernanke. He was one of three individuals Obama nominated in April to fill vacancies on the seven-member Fed board.
The others, Janet Yellen and Sarah Bloom Raskin, were unanimously confirmed last month before the Senate left town. Yellen was president of the Federal Reserve Bank of San Francisco, and Raskin was Maryland's commissioner of financial regulation.
Diamond's nomination was returned to the White House. Shelby argued at the time: "I do not believe he's ready to be a member of the Federal Reserve Board. I do not believe that the current environment of uncertainty would benefit from monetary policy decisions made by board members who are learning on the job."
Democrats took strong issue with the "learning on the job" comment. Obama promptly re-nominated Diamond.
Obama said on Monday that he had selected Diamond "to help bring his extraordinary expertise to our economic recovery. I hope he will be confirmed by the Senate as quickly as possible".
Associated Press
(China Daily 10/13/2010 page10)
