IF THERE were a Nobel prize for governmental dysfunction, US Senator Richard Shelby would be in contention — but then so would the US Senate as a whole. Shelby, the senior Republican on the Senate Banking Committee, has opposed President Obama’s nomination of Peter Diamond for a seat on the Federal Reserve board of governors on the dubious grounds that the MIT economist isn’t qualified for the post. The Royal Swedish Academy of Sciences somewhat undercut Shelby’s argument Monday, when it announced that Diamond will share the Nobel Prize for Economics.
The award is an embarrassment to Shelby, who’s denigrated an eminent scholar just to score political points against the Obama administration. It’s also an embarrassment to the entire Senate, whose arcane rules let individual members hold up important business, including nominations to key government posts.
The New York Times has reported that Republican opposition to Diamond is a form of payback, because Democrats previously blocked one of President Bush’s nominees from serving a full term on the Fed board. But instead of just saying that, Shelby has pretended that Diamond lacks sufficient experience.
Granted, Diamond isn’t a specialist in the Fed’s highest-profile area, the setting of interest rates. Yet neither is Janet Yellen or Sarah Raskin, two new members whose nominations Republicans allowed to proceed. In many other ways, Diamond, who once taught Ben Bernanke when the Fed chairman was a graduate student, is an obvious choice: He has done groundbreaking research on a range of issues relevant to the nation’s economic woes, from taxation to Social Security to inefficiencies in the job market.
Despite Shelby’s opposition, the Senate Banking Committee has already voted favorably on Diamond’s appointment. Even so, one or more Republican senators placed a hold on the nomination; a spokesman says Shelby isn’t one of them. The Senate is wrong to allow such holds. And while the public deserves to know at least who’s responsible, the chamber can’t even bring itself to pass legislation forbidding so-called secret holds.
The Nobel announcement may not soften Republican opposition to Diamond. In a statement, Shelby sniffed that “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 of the Federal Reserve system.’’ But while a Nobel Prize shouldn’t guarantee Diamond the Fed post, the breadth and importance of his work certainly should.