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June 06, 2011 8:00 AM Letting a Diamond slip away

By Steve Benen

Last year, the Senate Banking Committee twice approved Peter Diamond’s nomination to the Federal Reserve. And twice, the Senate wasn’t allowed to vote on Diamond because Sen. Richard Shelby (R-Ala.) and a handful of his far-right colleagues threw tantrums for unknown reasons.

So, this year, President Obama resubmitted the Diamond nomination. And once again, the petulant Republican from Alabama led a small contingent that decided they’re entitled to veto power over the process.

After more than a year of waiting for a simple vote, Diamond has given up. In a New York Times op-ed, the respected Nobel laureate explained why he’s withdrawing.

Instead of going to the Fed, however, I will go about my congenial professional existence as a professor at M.I.T., where I have taught and researched since 1966, and I will take advantage of some of the many opportunities that come to a Nobel laureate. So don’t worry about me.

But we should all worry about how distorted the confirmation process has become, and how little understanding of monetary policy there is among some of those responsible for its Congressional oversight. We need to preserve the independence of the Fed from efforts to politicize monetary policy and to limit the Fed’s ability to regulate financial firms.

It’s important to understand the significance of these developments. Diamond’s withdrawal offers a jarring reminder of the ways in which our political process, with increasing frequency, simply doesn’t work.

Diamond is among the most accomplished economists of his generation, and last year, was awarded a Nobel Prize in economics. And yet, there was Richard Shelby & Co., insisting that Diamond lacked the qualifications to join the board of governors of the Federal Reserve.

As far as the dimwitted senator and his cohorts were concerned, Diamond’s background is not in monetary policy, which necessarily raised doubts about his nomination. It’s true that this isn’t Diamond’s specific field, 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 — the Republican senator supported Bush’s unqualified nominee, raised no questions about the nominee’s background, and voted for confirmation.

Making matters worse, 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 just doesn’t like Diamond. The confused Alabamian had the option of registering his opposition by voting against Diamond’s nomination, but the Republican lawmaker decided that wasn’t good enough — the Nobel laureate was so offensive, Shelby believed the Senate simply couldn’t be allowed to vote on the nominee at all.

Cohn and Bernstein suggest the Obama White House deserves some of the blame, because the West Wing didn’t push the Diamond nomination as hard as it could have. Perhaps. But recent history suggests right-wing lawmakers generally don’t care about presidential pressure, and besides, the Senate should be able to function and complete its most basic tasks without constant reminders from Obama.

This is no way to run an advanced democracy in the 21st century. The result of this fiasco isn’t just the loss of a qualified nominee to an important post; it’s also a lost opportunity to have the Fed take actions to bolster the economy.

We can only hope that this wasn’t part of a larger campaign by Republicans to hurt the economy on purpose.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

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  • Bill on June 06, 2011 8:06 AM:

    "advanced democracy"

    What an adorable sentiment.

  • c u n d gulag on June 06, 2011 8:07 AM:

    In my opinion, Republicans aren't interested in making things better because that will reflect well on President Obama and the Democrats.

    If doing nothing keeps stalling the economy, then they'll do nothing.

    If it takes some subtle form of sabotage to stall it, then they'll do that.

    If it takes an overt form of sabotage, then they'll be overt about it.

    Party over Country!

    PARTY UBER ALLES!!!

  • Danp on June 06, 2011 8:08 AM:

    This is no way to run an advanced democracy in the 21st century

    When one of the two parties has or had front-runners whose main platforms were limited to a birth certificate (Trump) and a war against the "lamestream media" (Palin), it's hard to expect anything "advanced". It's getting to the point where it's folly to be wise.

  • SteveT on June 06, 2011 8:11 AM:

    And to all the idiotic Democrats who don't want to reform the confirmation process and the filibuster because they want to "preserve" the "institutions of the Senate":

    It is absolutely, one hundred percent certain that in the next time there is a Republican president that the Republicans will scrap everything you want to preserve before your asses even warm up the leather seats in the Senate chamber in order to ram through their president's nominees.

  • some guy on June 06, 2011 8:14 AM:

    Doesn't the Senate get to determine the precise rules under which it will operate at the start of each new session? Too bad the GOP has a majority in the Senate, eh?


    Maybe some day the Democratic Party will get it together and actually win a Senate majority. Contribute to the DSCC and some day in the not too distant future the Dems might win a majority. Every dollar counts!

  • Stephen Talbott on June 06, 2011 8:15 AM:

    I've believed for some time now that the Republican plan is to throw the U.S. economy into the ditch in front of the 2012 election. Nothing they have done in the House since they took back control indicates otherwise.

  • DK on June 06, 2011 8:16 AM:

    I suggest that from now until election 2012, every time a Democrat has an interview, speech, or op-ed, they should employ a evolving question.

    It would start out as some version of this; "Why are republicans talking down the American economy?"

    Eventually, we can short-hand it for the MSM like this: "Why are republicans talking down America?"

  • Ron Byers on June 06, 2011 8:17 AM:

    Benen, what makes you think we have an "advanced democracy." That is so European.

  • Kathryn on June 06, 2011 8:23 AM:

    "We can only hope this wasn't part of a larger campaign by Republicans to hurt the economy on purpose"

    Republicans only make moves to hurt the economy, period. What started with limbaugh saying he wanted Pres. Obama to fail is the only policy of the Republican Party, the media hasn't noticed. They're too busy chasing dumbell's bus, obsessing over Weiner's twitter account and presenting GOP positions as sane.

    I encourage all to email everyone they know who is vaguely sensible and have them pull up Nicolas D. Kristof's column in New York Times yesterday titled "Our Fantasy Nation?" and have those folks send it on. I just did . I believe Steve mentioned column yesterday in a post. It's powerful and disseminating it can only help. It has the added bonus of actual facts which is rare on the internet, Decided not to sent to conservative relatives who use to send me distored lying emails since Obama election. Would be interested in knowing if posters to this site think it should also go to conservatives? Is there any hope of reaching such folks? Thanks. I can't stop thinking about Kristof's column.

  • Mr. Serf Man on June 06, 2011 8:23 AM:

    "We can only hope that this wasn’t part of a larger campaign by Republicans to hurt the economy on purpose."
    PUULLLEEZE
    That is the only thing, they are interested in. You didn't see the dancing in the streets over the latest job numbers. They couldn't be happier.
    For republicans on the other side of the looking glass
    Good News = Bad news
    Bad News = Good news

    Freedom is Slavery
    Ignorance is Strength
    War is Peace

    Dontcha get it?

  • impik on June 06, 2011 8:28 AM:

    "We can only hope that this wasn’t part of a larger campaign by Republicans to hurt the economy on purpose."

    Really, Steve? Really? You still have doubts?

  • Bernard HP Gilroy on June 06, 2011 8:30 AM:

    More shenanigans from the Banana Republicans. Is there any recent evidence that our political system can function?

  • berttheclock on June 06, 2011 8:31 AM:

    At least, Shelby is consistent with his policy of Banks Uber Alles. He has used "Right to Privacy" to protect banks from any reviews and oversight.

    Mean spirited old "boll weevil". He was responsible for keeping Anthony Lake from becoming the Director of the CIA and used snits over the Boeing air tanker deal to block other nominations.

  • MR Bill on June 06, 2011 8:34 AM:

    I have been quite sure the Republicans planned to hurt the economy on purpose since at least '07: seeing that the next president was probably a Democrat, they could crash the economy (and make billions) with a real estate bubble, and stick the bad economy to the next president (who gets blamed for TARP, et. al). All they had to do was play interference on the right to keep that president from getting FDR-like policies, and get back in..
    And after watching Austin Goolsby's appalling performance on "This Week", it seem the Democrat was a Black Mitt Romney, who is doing their work for them...

  • martin on June 06, 2011 8:39 AM:

    I guess it has been awhile since I apologized for the quality of politician we elect in this state.

    But please let me point out it is "dimwitted multi-millionaire senator" to you.

  • some guy on June 06, 2011 8:44 AM:

    speaking of the Bankster Scum Lapdog Coalition, how is Jon Tester's plan to delay the Durbin Rule coming along?

  • Chief on June 06, 2011 8:47 AM:

    c u n d gulag expressed my sentiments better than I could have.

    Also, recall back to 1990 or 91. Bush 1 was running for reelection. We were in or just recovering from a recession.

    Senate majority leader George Mitchell held up legislation just long enough so that the voting public would blame the slow recovery in Bush. Clinton won.

    Is this any different in effect?

  • zeitgeist on June 06, 2011 8:51 AM:

    suggest the Obama White House deserves some of the blame

    Nonsense. If Obama weren't fighting, he would not have renominated Diamond to begin with.

    There is no question, however, that Reid deserves some of the blame. Blow up the f*cking rules if you have to, ignore the hold and force a vote to overrule the chair (which requires 2/3rds), whatever it takes. But don't just let a minority of the minority screw up the entire chamber. Be a leader for chrissakes. That's what that plate on your door says, after all.

  • stevio on June 06, 2011 8:53 AM:

    We can only hope that this wasn’t part of a larger campaign by Republicans to hurt the economy on purpose.

    THIRD WORLD AMERICA

  • FRP on June 06, 2011 9:00 AM:

    Different in scale , intent , and execution . Otherwise yeah I see some peas in China , thanks .

  • John Puma on June 06, 2011 9:09 AM:

    Quote: "We can only hope that this wasn’t part of a larger campaign by Republicans to hurt the economy on purpose."

    It's not clear how you could have missed, on or about Jan 20, 2009, the resounding GOP consensus: "WE HOPE OBAMA FAILS"

    They were NOT kidding then and if it takes further damage to the economy, then so be it.

    They were not kidding recently when they said that they can get away with blaming Obama for fall out from their destruction "the full faith and credit" of the US throughout "the global economy."

  • ComradeAnon on June 06, 2011 9:12 AM:

    Perhaps Shelby is holding out for the Auburn Oaks poisoner.

  • Alli on June 06, 2011 9:49 AM:

    Wow. people never fail to blame Obama for not 'fighting' enough while at the same time telling him that Republicans will never compromise.

  • Big River Bandido on June 06, 2011 10:11 AM:

    We can only hope that this wasn't part of a larger campaign by Republicans to hurt the economy on purpose.

    Three years of this nonsense and you're still wondering???

  • Big River Bandido on June 06, 2011 10:22 AM:

    some guy:

    Doesn't the Senate get to determine the precise rules under which it will operate at the start of each new session? Too bad the GOP has a majority in the Senate, eh?

    No, the Democrats have the majority, but I assume that was snark on your part.

    Contribute to the DSCC and some day in the not too distant future the Dems might win a majority. Every dollar counts!

    If you give to the DSCC and DCCC, expect exactly the dysfunction and paralysis to continue. The party campaign committees are completely corrupt, and the Democratic campaign committees are the nursery for all the foolish policy "debates" about stuff like "austerity" going on in Democratic circles.

  • Texas Aggie on June 06, 2011 10:56 AM:

    "We can only hope that this wasn’t part of a larger campaign by Republicans to hurt the economy on purpose."

    Since it serves the same purpose as being part of a larger campaign to hurt the economy on purpose, does it even matter if it is an isolated instance or part of a conglomerate whole? The "republican brand" is such that it forces normal people to act like A-hats, so what does it matter that a registered A-hat like Shelby acts on his own or as part of a conspiracy?

  • rrk1 on June 06, 2011 10:59 AM:

    We can only hope that this wasn't part of a larger campaign by Republicans to hurt the economy on purpose.

    I would like to think, Steve, that you said that 'tongue-in-cheek'. The Rethugs are so blatantly transparent in their motives and actions a bright high school student could figure it all out. Sad to say, when throwing the economy under the bus for political ends is the primary goal of one political party it is obvious that the health, safety, and welfare of our country will wind up sitting at the back of the bus.

    As long as Obama's administration continues to surrender the propaganda megaphone to the Rethugs, and continues to tilt at the windmill of fantasy bipartisanship it only encourages the insane party to be more insane. They pay no price. What happens when the Frankenstein monster of debt default set loose by the Rethugs gets out of control? Oh, yes, of course, that would be Obama's fault, and he'll meekly say, as the Dickensian character did, "May I have some more, sir?"

  • Roger the Cabin Boy on June 06, 2011 11:19 AM:

    Republicans will continue to sabotage any efforts by the WH and Democrats to improve the economy because that would jeopardize republicans' regaining the WH and Senate in '12. Lather, rinse, repeat. And note that they don't really care who gets hurt in the process.

    Plus, once they regain power they won't do anything to fix the economy themselves but they will do everything they can (voter ID laws, caging, suppressing new voter registration, fake voter fraud investigations) to make it even more difficult for Democrats to be elected. And they'll reward their patrons with our tax money so some of it can be funneled back to their campaign funds so they can stay in office and reward their patrons. And on And on. And on.

    Why don't the Democrats and the media get this?

  • JW on June 06, 2011 11:28 AM:

    "We can only hope that this wasnÕt part of a larger campaign by Republicans to hurt the economy on purpose".

    As always, Benen, you sound like such a wuss when you extend the party of Rule or Ruin the benefit of any doubt.

  • Silver Owl on June 06, 2011 12:30 PM:

    With today's republicans all job positions require, dumb white conservative that enjoys blowing other white conservatives. Spinelessness and complete ignorance manadatory.

  • Zach on June 06, 2011 12:35 PM:

    Steve, I appreciate your willingness to give Republicans the benefit of the doubt, but at this point, it is all to clear that they are sabotaging the economy on purpose for electoral gain. How else can you explain their policy? Everything the congress has done up to this point, either by action or inaction, has been shown to hurt the economy and add to uncertainty. I know there are some unwitting accomplices in the House that don't know enough about public policy to make a decision based on anything other than rigid ideology, but the leadership knows. For the most part, the Senators know. The think tanks know. Hopefully, the American people will figure this out too.

  • Zach on June 06, 2011 12:43 PM:

    "Also, recall back to 1990 or 91. Bush 1 was running for reelection. We were in or just recovering from a recession.

    Senate majority leader George Mitchell held up legislation just long enough so that the voting public would blame the slow recovery in Bush. Clinton won.

    Is this any different in effect??

    Chief, here is the difference. While I don't support any action that puts electoral politics ahead of progress for the country as a whole, the policies that Mitchell passed actually helped the economy grow. Show me one policy that the Republicans have proposed that will do the same. It's one thing to hold effective legislation hostage during an election season, its another to outright block effective legislation or propose destructive legislation.

    I think there is a difference.

  • Squeaky McCrinkle on June 06, 2011 4:46 PM:

    Stephen Talbott on June 06, 2011 8:15 AM: I've believed for some time now that the Republican plan is to throw the U.S. economy into the ditch in front of the 2012 election. Nothing they have done in the House since they took back control indicates otherwise.

    Precisely. And the more damage they can do, the better and more urgent their "recovery" plans will look to desperate, out-of-work Americans.

    And thanks for dragging a lot of the rest of the world down with you.

  • sphinx on June 06, 2011 6:48 PM:

    This isn't the only gem that's slipping away. Pres. Obama should have made recess appointments a long time ago. Now that the GOP is on to this process, good luck Mr. president with getting ANY of your nominees into office.

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