Peter Diamond, Macro Maven: This is disgusting: Senate Republicans holding up Peter Diamond’s nomination to the Federal Reserve Board on the grounds that he may not be qualified to make monetary policy. Aside from the fact that the same Senators cheerfully confirmed Bush nominees who didn’t know much about economics of any kind, this is especially stupid right now. Why? Because right now one of the hot topics is whether the apparent shift in the Beveridge curve signals a rise in structural unemployment — and Diamond wrote the seminal paper on the whole subject — the top result on Google scholar. Diamond is exactly the man we need — which, given the way things have been going lately, probably means he won’t get confirmed.
And I had just gotten around to writing:
When I first learned that the Obama administration was thinking of nominating Peter Diamond to the FRB, it struck me as a truly excellent and inspired choice. Peter Diamond is as intelligent and articulate as Larry Summers, and a lot less abrasive. A great deal of his work in economic theory has been directed toward strengthening the foundations of our understanding of central banking and social insurance--indeed, one of my most advanced macroeconomic classes was nothing but a set of changes rung upon a particular model that Peter Diamond had advanced at... I think the start of the 1960s.
Peter Diamond is an inspired choice for the Fed in the same way that Randy Kroszner was--from the opposite direction--an inspired choice for the Fed. Both have spent large chunks of their career studying the underpinnings, theoretical and historical, of current central banking doctrines, policies, and methods. You do not want a policy-making committee dominated by people who look at the issues from a more first-principles perspective. But on a nineteen-member committee you surely want one or two such.