Peter Diamond Fed Hold Shows the Senate's an Embarrassment

A Nobel Prize-winner for the fed? Not if the GOP has anything to say about it.

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As consolation prizes go, it doesn’t get much better than the one awarded to the long-respected, now officially brilliant Massachusetts Institute of Technology economist Peter Diamond. Diamond, lauded for his research on the dynamics of the labor market, was given the Nobel Prize in economics for his work. The honor not only establishes Diamond as an internationally recognized genius on an issue of critical importance to both the United States and the world, but it carries a $1.5 million prize Diamond will share with two other economists.

That’s not enough, however, for Republican Alabama Sen. Richard Shelby, who has been holding up Diamond’s appointment to the Federal Reserve Board.

[See where Shelby gets his campaign money.]

“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,” Shelby said in a statement after Diamond’s honor was announced.

What does Shelby want? A majority of American Idol viewers?

Of course, this isn’t really about Diamond’s qualifications at all. It’s about a U.S. Senate that has become so dysfunctional and poisonous that the minority party is holding up nominations just to prove it can. Sometimes, a nomination is blocked as a tactic to negotiate other, completely unrelated legislation. Other times, as was the case with Centers for Medicare and Medicaid Services administrator Dr. Donald Berwick, the fight was about extending a political battle over healthcare overhaul well into the campaign season. And in nearly all cases, the holds keep the president from doing what he was elected to do: run the government. It’s harder to do that when the Senate won’t approve the people the elected president picked to do the jobs.

More than 200 of President Obama’s nominees are still awaiting confirmation, and they’re not all political footballs, as Berwick was (Obama eventually installed Berwick as a recess appointee). Federal marshals, U.S. attorneys, chiefs of mission to U.S. embassies--they’re just waiting for the whim of the Senate minority (in some cases, a single member of the Senate minority) to change, allowing the nominees to start their jobs.

Diamond’s holdup, once an example of out-of-control politics, is now an international embarrassment. Remarkably, Diamond said after he was awarded the prize that he had no intention of withdrawing his name from nomination. That’s a commitment to public service almost as impressive as his scholarship in economics. The Senate should let him serve.

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