Sweet revenge for Peter Diamond

What do Republicans have in common with China’s communist leadership? They’d probably both like to make the Nobel Prize people disappear from the face of the earth.

On Friday, the scandalous Scandinavians infuriated the Chinese leadership by awarding the Nobel Peace Prize to Liu Xiaobo, the imprisoned literary critic and political dissenter. The Chinese, who had publicly warned the Nobel committee against honoring Liu, then denounced the award as blasphemous, banned celebrations, arrested some of his supporters and called the Norwegian ambassador in for a tongue-lashing,

Now the Swedish Royal Academy of Sciences has awarded the Nobel economics prize to three economists, including Peter Diamond of MIT — whom Senate Republicans blocked from becoming a Fed governor on the grounds tha he didn’t have enough experience. Two years ago, they awarded the economics prize to Paul Krugman — the bete noire of conservatives. And of course they awarded the Peace Prize to former vice president Al Gore in 2007 for his work on global warning (a double insult, given how many Republicans were still denying the global warming) and to President Obama in 2009 for, well, getting elected president.

As Glenn Beck might say, I’m not saying that Senate Republicans are Chinese Communist party leaders. And I think we can all agree that Obama’s peace prize was silly. But isn’t it interesting that so many Nobel prizes have been going to people whom Republicans trash and even vilify?

I wholeheartedly echo Andrew Samwick’s heartfelt congratulations to Peter Diamond, who will share the economics prize this year with Dale Mortensen of Northwestern University and Christopher Pissarides of the London School of Economics. I know Diamond primarily through his work on Social Security and pensions, where he has long been one of the most clear-headed and thoughtful analysts in the country. When George W. Bush was campaigning to partially privatize Social Security, Diamond helped me and countless other journalists, not to mention lawmakers and policymakers, dissect the issues and unravel the distorted claims and counterclaims.

When Obama nominated Diamond to be a governor at the Federal Reserve Board, Senate Republicans including Richard Shelby of Alabama blocked his confirmation and complained that he lacked enough experience. The complaint was preposterous; Diamond isn’t a specialist in monetary policy, but he is a huge authority in other areas of economics. Fed governors have always come from a variety of non-macro backgrounds, notably banking and financial regulation. And some who were indeed macroeconomists — Arthur Burns, anyone? — were horrible.

The Swedish Royal Academy of Sciences said that Diamond, Mortensen and Pissarides helped explain why it is possible for many people to be unemployed at the same time that companies are looking for workers. Diamond provided the crucial theoretical framework for analyzing the dynamics of searching, which Mortensen and Pissarides applied to the labor market. As is happens, this is a vital and timely issue in macroeconomics, given that we are now looking at years of prolonged high unemployment and under-utilization of capacity. It will become ven more urgent when the economic recovery picks up more steam and structural tensions in the labor force assert themselves.

Many will say this just confirms the mush-brained biases of snooty euro-pacifist-socialists. But maybe Republican politicians have retreated so deeply into their partisan cocoons that they no longer even try to grapple with the real world. Diamond’s nomination was widely praised by prominent Fed economists, including Larry Meyer of Macroeconomic Advisers. Why did this highly esteemed and non-partisan scholar deserve to be trashed on the Senate floor?

The White House had already resubmitted his nomination to the Senate before the Nobel award, and it will probably be hard for Republicans to object to a Nobel prize winner and keep a straight face. But hey, Diamond would have to take a pay cut if he accepts the post. Maybe he has better things to do. If so, it’s our loss.

About Edmund L. Andrews 37 Articles

Edmund L. Andrews spent two decades as a business and economics correspondent for The New York Times. During that time, he covered many of the nation ’s most transforming events, from the Internet and biotech revolutions to the emergence of capitalism in central Europe and Russia and the Federal Reserve under Alan Greenspan and Ben S. Bernanke. In 2009 he published BUSTED: Life Inside the Great Mortgage Meltdown (WW Norton), his own harrowingly personal account of the epic financial crisis. He has frequently appeared on major television and radio news programs, from the NewsHour with Jim Lehrer and Today to 20/20, All Things Considered, Lou Dobbs on CNN, the Colbert Show, BBC Worldwide, MSNBC and CNBC.

Ed began his affiliation with The Times in 1988 when he covered patents, telecommunications, and technology. In 1992, he joined the Washington bureau of The Times as a domestic correspondent and reported extensively on the business and politics surrounding the convergence of cable television, the Internet and broadband digital networks. In 1996, Ed became The Times’ European economics correspondent and its Frankfurt bureau chief. He returned to Washington in 2002 and became the bureau’s lead economics correspondent and The Times’ main eyes and ears on the Federal Reserve.

Prior to joining The Times, Ed worked as a magazine writer specializing in business and economics. Before that, he was an assignment editor for Cable News Network in Washington and an education and city government reporter at The Sentinel-Record in Hot Springs, Ark.

Ed graduated magna cum laude from Colgate University in 1978 with high honors in international relations. In 1981, he received a master’s degree in journalism from Northwestern University. He is married to Patricia Barreiro and has four children – Ryan, Matthew, Daniel and Emily.

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