Today, Nobel Prize-winning MIT economist Peter Diamond withdrew his nomination to the board of governors of the Federal Reserve System — a nomination that originally went up in April 2010.
In a New York Times op-ed, Diamond says that the Hill’s hyper-partisanship is more forceful than his Nobel Prize. He also says that “a failure to recognize that analysis of unemployment [the subject of Diamond’s work] is crucial to conducting monetary policy.
It is interesting that Mr. Diamond does not address the legal obstacles to his nomination. The foremost is that there can only be one board member from the same Fed district at any one time. As Mr. Diamond notes he has been at MIT “since 1966” and not living in Chicago, as the White House claims. Whatever his academic qualifications, by law he is prohibited from serving on the Fed Board. If congressional Democrats don’t like the law, they can try to change it, but we should not just ignore it. Such only breeds a contempt for the law and a belief that the laws only apply to the masses and not the elite.