Economists Here and There

Tue, 07 Jun 2011 12:23:51 +0000

When historians look back at our era and write about how a nation so blessed was able to squander those blessings so dramatically, they won't have to look much further than the U.S. Senate.  Words, polite ones anyway, cannot really express how how absurd it is that the nomination of Peter Diamond for the Board of Governors of the Federal Reserve System has come down to this.  Even without the Nobel Prize, his qualifications for the position were beyond question -- at least by anyone who could be persuaded by the answers.  I continue to wonder whether our society is resilient enough to withstand many more years of this institutionalized immaturity on important policy matters. 

With Austan Goolsbee's resignation as CEA Chairman, most speculation will turn to his successor and this summer's Senate confirmation process.  And, no, I don't think President Obama will nominate Peter Diamond to be the CEA Chairman, though he is, once again, more than qualified for the position.  The next CEA Chairman will have to be someone not currently associated with the Obama Administration, so that the confirmation hearings can be less of a retrospective on Obama's policies to date and more of a forward-looking discussion of what could and should be done.  And I don't envy Goolsbee's successor, for two reasons.  First, outsiders have a terrible time trying to be heard by those who have been around since the campaign and have developed trust and established ways of working together.  Second, by the time this person takes office, the entire economic agenda will be driven by the 2012 election campaign and not the more thoughtful possibilities for crafting policy.