Washington Extra – Nobel committee polishes Diamond’s credentials

October 11, 2010

After irking the Chinese with the award of the Nobel peace prize last week, the Nobel committee set a few feathers flying in Washington today by awarding the economics prize to Peter Diamond, an MIT professor who has also been nominated by President Barack Obama for a spot on the Board of Governors of the Federal Reserve.pdiamond

Diamond’s nomination to the Fed job has been held up by Senate Republicans who have questioned his qualifications. At the time Richard Shelby, the most senior Republican on the Senate Banking Committee said the current uncertain environment would not benefit from board members deciding monetary policy “who are learning on the job” and told Reuters Diamond was a “behavioral man” who had no background in monetary policy and the economy.

It is a probably little conspiratorial to suggest the Nobel committee was deliberately tweaking Republican noses by recognizing Diamond along with two other leading economists for their work in helping to explain unemployment and jobs markets. Nevertheless, critics are bound to seize on this, along with Obama’s peace prize last year and Paul Krugman’s economics prize in 2008, to draw their own conclusions.

The White House wasted no time in making political capital from the award, with Obama urging speedy confirmation so Diamond could bring his “extraordinary expertise” to the Fed job. Spokesman Robert Gibbs said blocking Diamond was a “harmful attempt to score political points that hurts our middle class and our broader economic recovery.”

Shelby was unbowed. “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,” he said.

Diamond told a press conference he had no plans to withdraw his name from consideration for the Fed job, and just for good measure said the United States needed a second stimulus bill to help stem the deepening problem of local government job losses. Washington Extra is looking forward to the nomination hearings.

Here are our top stories from Washington today…

Foreclosure halt could hit investors

A U.S.-wide foreclosure moratorium could penalize investors and make new home loans more expensive and harder to obtain, an investor group and industry experts warned. While homeowners may cheer efforts to get tough with banks, an increasing number of analysts warn that that a blanket ban on foreclosures could further hobble the economy.

For more of this story, read here.

Obama hammers Republicans after Fed pick wins Nobel

President Obama seized on the award of the Nobel prize in economics to his pick for the Federal Reserve to ratchet up pressure on Senate Republicans, who have blocked the confirmation. Peter Diamond’s nomination is among dozens the White House says are being held up in the Senate. “I have nominated Peter to the Board of Governors of the Federal Reserve to help bring his extraordinary expertise to our economic recovery,” Obama said in a statement. “I hope he will be confirmed by the Senate as quickly as possible.”

For more of this story by Alister Bull, read here.

Nobel winner Diamond says U.S. needs second stimulus

Peter Diamond, a 2010 Nobel economics prize winner who has been nominated to the Federal Reserve board, said a second stimulus bill would help stem the deepening problem of local government worker job losses. Diamond said a second effort “would be valuable,” especially if the federal government stepped in to help state and local governments save jobs for such employees as teachers, firefighters, police, and social workers.

For more of this story, read here.

US decision on China yuan practices looms again

President Obama faces a deadline on Friday on whether to formally declare for the first time that China undervalues its currency, following a vote in Congress to get tough with Beijing. An IMF meeting last weekend failed to defuse tensions between China and some developed countries, including the United States, that are pressing Beijing to allow the yuan to appreciate.

For more of this story by Doug Palmer, read here.

In coal state, a Democrat keeps Obama at a distance

Democratic Governor Joe Manchin once seemed certain to win a Senate seat in coal-rich West Virginia, but voter anger over policies from climate change to healthcare are putting him in danger of losing. Manchin’s battle to escape being swept aside mirrors what Democrats in Senate races around the country are facing as they try to survive a turbulent political environment and win in Nov. 2 congressional elections. With opposition running high in West Virginia to President Obama, Manchin is struggling to convince voters he would be his own man and not rubber-stamp Democratic policies if sent to Washington.

For more of this story by Steve Holland, read here.

Monetary policy’s diminishing returns

The Federal Reserve runs the risk of diminishing returns from its next round of money printing, but that won’t stop it from trying.

For more of this story by Emily Kaiser, read here.

SCENARIOS-Republican election impact on climate control

Big gains in November could put Republicans in position to reverse Democrats’ drive for climate control legislation. A Republican takeover of either chamber, or even large gains by Republicans, will make it harder for President Obama to win mandatory reductions of greenhouse gas emissions from smokestacks and tailpipes.

What to look out for on energy and climate policy for if Republicans win big here.

First patient treated in Geron stem cell trial

Doctors have begun treating the first patient to receive human embryonic stem cells, but details of the landmark clinical trial are being kept confidential. Geron Corp has the first FDA license to use the controversial cells to treat people, in this case patients with new spinal cord injuries. It is the first publicly known use of human embryonic stem cells in people.

For more of this story by Maggie Fox, read here.

For a factbox on the controversial stem cell issue, click here.

What we are blogging…

NY governor candidate Paladino says he only opposes gay marriage (and doesn’t like the parades)

Carl Paladino, the Tea Party backed Republican running for New York governor, says he is not against homosexuals, only gay marriage and taking children to gay pride parades. News reports quoted Paladino, in remarks to Orthodox Jewish leaders in Brooklyn on Sunday, saying: “I just think my children and your children would be much better off and much more successful getting married and raising a family, and I don’t want them brainwashed into thinking that homosexuality is an equally valid and successful option — it isn’t.”

For Tabassum Zakaria’s full post, click here.

From elsewhere…

Ecuador turns recent unrest into a music video

Recent police riots in which Ecuadorean President Rafael Correa was tear gassed, roughed up and trapped in a hospital for hours by officers angry over bonus cuts has been turned into a music video. The video, which is set to the music of “Hey Jude” by the Beatles, intercuts news footage of the September 30 unrest with singers crooning passionately about Correa’s “Citizens’ Revolution.”

For more of this story, read here.

Malaysia Islamists object to Adam Lambert concert

Malaysia’s Islamist opposition party has demanded that authorities cancel a planned concert by rocker Adam Lambert that they say is promoting “gay culture” in the mainly Muslim country. “Adam Lambert’s shows… are outrageous, with lewd dancing and a gay performance that includes kissing male dancers, this is not good for people in our country,” one leader said. Homosexual sex is a criminal offence in Malaysia.

For more of this story, read here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credit: REUTERS/Brian Snyder (Professor Peter Diamond (R), co-winner of the 2010 Nobel Prize for Economics, laughs with colleagues at Massachusetts Institute of Technology after a news conference at MIT in Cambridge)

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The GOP needs more than a tweaked nose, it needs a kick in the nads to get it to start behaving in a more civil manner as if it actually cared about the people it supposedly represents instead of the big donors who keep it in business.

Posted by borisjimbo | Report as abusive