MIT Economics professor and Nobel laureate Peter Diamond took a regrettable but understandable step this week when he withdrew his nomination to the Federal Reserve Board, after Senate Republicans — most notably Richard Shelby, ranking GOP member of the Banking Committee — stood firm against his appointment. It’s bad enough that cynical behind-the-scenes gamesmanship can keep a highly qualified nominee in limbo for more than a year without an up-or-down vote by the full Senate. Worse yet, Diamond’s fate suggests that academic credentials and interesting ideas have somehow become a disqualification for important economic-policy positions.
Much of Diamond’s work has focused on the economics of the labor market. This is useful expertise, because managing the tradeoffs between fighting inflation and minimizing unemployment is a key part of the Fed’s job. While Shelby and others have cast vague aspersions on Diamond’s experience at “crisis management,’’ the more likely story is that they just dislike Diamond’s views but don’t have the courage to enter into an honest debate. The same dynamic has bedeviled Elizabeth Warren, the Harvard Law professor who conceived of and now oversees the Consumer Protection Financial Bureau. The full Senate should be able at least to consider such nominees.
The Senate GOP’s intransigence seems to be having its intended effect, as President Obama has avoided any risks — and any bold thinking — in choosing his recent nominees for key posts. Last week, Obama appointed John Bryson as the new Secretary of Commerce to replace Gary Locke. Bryson, the retired president of a utility company, is an able business executive endorsed by the US Chamber of Commerce — a key Republican constituency — and many GOP lawmakers. His long, unobjectionable managerial record seemingly makes him a safe choice for confirmation.
Even so, his work as founder of the environmental activist group the Natural Resources Defense Council back in the ’70s has aroused some conservative opposition, suggesting his nomination won’t pass through the Senate unscathed. That’s fine; it’s the way the system is supposed to work. Presidential appointments should be scrutinzed and then either approved or rejected. If Republicans believe that figures such as Diamond or Warren are unfit for high-level posts, they should make that argument before the full Senate. By harpooning Diamond’s nomination behind the scenes, they can only discourage other people with creative ideas and a written track record from seeking influential public posts.
Diamond will go back to his distinguished academic career. His work will remain influential. But the loss is all ours.