Tales from the Trail

Washington Extra – Nobel committee polishes Diamond’s credentials

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.

Washington Extra – Gridlock and the fiscal deficit

summit

The term gridlock may have first entered the vocabulary during the 1980 New York transit strike, reportedly coined by “Gridlock Sam” Schwartz, chief traffic engineer in the city’s transport department.  In those days it was definitely not something to aspire to. It is a different story in 2010.

“Gridlock’s not all bad,” Republican Senator Richard Shelby told the Reuters Washington Summit today, citing the need to “slow things down” politically.  His fellow Senator and Tea Party champion Jim DeMint would probably go even further.

But is that really what lies in store after the midterm elections?

Republican and Democratic speakers on the first day of the summit agreed on one thing above all else: that the other party is to blame for the lack of bipartisanship in Washington.