Last year, Federal Reserve Board nominee Peter Diamond won the Nobel Prize in Economics. Nevertheless, Senate Banking Committee Ranking Member Richard Shelby (R-AL) has held up Diamond’s nomination because he deemed the Nobel laureate too unqualified to help set economic policy. Yesterday, after it became clear that the Republican caucus would back Shelby and prevent his confirmation, Diamond published an op-ed announcing that he would withdraw his nomination — and taking a shot at the economically challenged Republicans who blocked his confirmation:
[W]e should all worry about how distorted the confirmation process has become, and how little understanding of monetary policy there is among some of those responsible for its Congressional oversight. We need to preserve the independence of the Fed from efforts to politicize monetary policy and to limit the Fed’s ability to regulate financial firms.
Concern about the (seemingly low) current risk of future inflation should not erase concern about the large costs of continuing high unemployment. Concern about the distant risk of a genuine inability to handle our national debt should not erase concern about the risk to the economy from too much short-run fiscal tightening. [...]
Skilled analytical thinking should not be drowned out by mistaken, ideologically driven views that more is always better or less is always better. I had hoped to bring some of my own expertise and experience to the Fed. Now I hope someone else can.
Diamond is correct to worry about an oversight process where key players possess neither the knowledge to do their job nor the humility to get out of the way of people who do. Shelby’s absurd claim that a man who was recently recognized as one of the world’s leading economists is unqualified to sit on the Fed does nothing more than reveal Shelby’s lack of seriousness. And, on the House side, monetary policy oversight is even worse. Rep. Ron Paul (R-TX), who chairs the subcommittee overseeing monetary policy, has claimed that paper money is “nothing short of counterfeiting,” and has even called the U.S. dollar unconstitutional.
Nor is this disease limited to monetary policy oversight. Republicans clearly know nothing about the Constitution. Leading Republicans have called everything from child labor laws to the ban on whites only lunch counters to the minimum wage to Pell Grants and federal student loans to Social Security and Medicare unconstitutional. And yet these same Republicans have demanded a sweeping veto power over President Obama’s judicial nominees. As a result, the Senate confirmed fewer judges in Obama’s first two years than in the same period in any new presidency in American history.
This is a recipe for disaster. If Senate Republicans want to actually take the time to learn something about the matters they oversee, than they have a duty to bring their expertise to bear in judging nominations. So long as they insist upon valuing ideology over knowledge, however, they should keep their ignorant hands away from things that they clearly do not understand.