Monday, June 6, 2011

Pawn of the system

Peter Diamond took to the New York Times op-ed page to complain about his now-defunct bid to become a Federal Reserve governor:
LAST October, I won the Nobel Prize in economics for my work on unemployment and the labor market. But I am unqualified to serve on the board of the Federal Reserve — at least according to the Republican senators who have blocked my nomination. How can this be?

The easy answer is to point to shortcomings in our confirmation process and to partisan polarization in Washington. The more troubling answer, though, points to a fundamental misunderstanding: a failure to recognize that analysis of unemployment is crucial to conducting monetary policy.

This is one instance in which the easy answer is, in fact, the correct one: the Republican Senators would’ve rejected Milton Friedman himself had the Obama administration nominated him. It may be more comforting to Mr. Diamond that he was rejected as a consequence of his beliefs—which at least feels personal rather than being a pawn of the system that the alternative posits—but Mr. Diamond is a pawn of the system. Sorry.

(This is a convenient time to remind you that the Constitutional system of confirmations has become obsolete in our partisan-inflected times.)

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