It's a wonder fewer Republicans are calling for an invasion of Norway -- the Nobel prize committee keeps favoring American economists with its prize for Economic Science at the most galling times. First, they gave Paul Krugman a Nobel as the debate over fiscal stimulus began in 2008. Now, they've awarded Peter Diamond the prize, along with two others, for their groundbreaking work in understanding labor-market mismatches. Diamond, readers will remember, has been nominated by President Obama to join the Federal Reserve Board but has been repeatedly held up because some Republicans believe he is "unqualified" for the position. Says the Times:
The work is considered by many researchers to be particularly timely in today’s economic climate, in which many developed countries like the United States are facing stubbornly high unemployment rates. For example, the theory developed by the three economists has been used to try to design alternative unemployment benefit systems, and to determine how hiring and firing costs affect the unemployment rate.
Maybe Republicans are simply prone to the same kind of weird mental block that makes famous economists and anyone on the Fed forget that the institution has a purpose other than maintaining price stability (full employment, ahem), but if you needed any more indication at how broken the Senate is, I'm not sure you can find a better one than this: The United States, purportedly the world's most advanced economy, cannot put a Nobel-prize winning economist on the board of its central bank because of obstruction from a minority of one House of Congress.
-- Tim Fernholz