Fed Nominee Whom Sen. Shelby Deemed Too Unqualified To Confirm Wins Nobel Prize

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"Fed Nominee Whom Sen. Shelby Deemed Too Unqualified To Confirm Wins Nobel Prize"

Richard Shelby thinks this Nobel laureate is unqualified to set monetary policy.

Richard Shelby thinks this Nobel laureate is unqualified to set monetary policy.

Earlier today, Federal Reserve Board nominee Peter Diamond won the Nobel Prize in Economics along with two of his colleagues. Yet, despite the fact that President Obama nominated this Nobel laureate to the Fed nearly six months ago, his nomination is currently being blocked by just one senator. Sen. Richard Shelby (R-AL) believes that this year’s winner of the highest honor in the economics profession is unqualified to actually set economic policy:

[U]nder an arcane procedural rule, the Senate sent Mr. Diamond’s nomination back to the White House on Thursday night before starting its summer recess. A leading Republican senator, Richard C. Shelby of Alabama, said that Mr. Diamond did not have sufficiently broad macroeconomic experience to help run the central bank. […]

As Mr. Shelby noted, Mr. Diamond is not a specialist in monetary economics — the control of the supply of credit and the setting of interest rates — which is the Fed’s traditional purview. But of the five current governors of the Fed, only two, Mr. Bernanke and the vice chairman, Donald L. Kohn, are academic economists who specialize in monetary economics. The other three include a former community banker, a former Wall Street executive and a legal scholar.

Shelby, of course, has a history of this kind of abuse of the Senate Rules to prevent eminently qualified nominees from being confirmed. Earlier this year, Shelby briefly took over 70 nominees hostage in an attempt to strongarm the administration into awarding a $35 billion defense contract to his state — although he later lifted these holds once they became politically embarrassing.

But Shelby, of course, is only able to get away with these kinds of shenanigans because the Senate’s rules are shockingly easy to abuse. Indeed, while it is common wisdom that 60 senators are required to get virtually anything done, the reality is much bleaker — most Senate business now requires all 100 senators to consent.

The reason for this is because dissenting senators can force the Senate to waste hours or even days effectively doing nothing in order to pass a single bill or confirm a single nominee. Indeed, as a recent Center for American Progress white paper explains, there isn’t enough time in two entire presidential terms to confirm all of a new president’s nominees by the time that president leaves office:

TyrannyofTime_webcharts-01

In other words, the entire government can be hollowed out by a tiny group of senators with a vendetta. Today, Sen. Shelby thinks that a Nobel laureate doesn’t know enough about economics, so that nominee must languish without an up or down vote.  Tomorrow, another senator could disapprove of a nominee’s haircut, and that alone may be sufficient to spike the nomination.

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