Sen. Shelby’s Ridiculous Opposition to Nobel Prize Winner

Sen. Shelby’s Ridiculous Opposition to Nobel Prize Winner

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In celebration of the 100th anniversary of the American Economic Review, the top peer-reviewed journal of the American Economic Association, a committee of six prominent economists has chosen a list of the top 20 articles it has published.

The articles were chosen on the basis of “sheer intellectual quality, influence on the ideas and practices of economists, and significance or breadth,” the committee said in a statement.

Several articles had co-authors, so altogether work by 27 economists made the list, 12 of them Nobel laureates. Two of the latter group, Joseph E. Stiglitz of Columbia University and James A. Mirrlees, an emeritus professor at Cambridge University, with others co-authored of two of the 20 articles.
The only economist who wrote or co-authored three of the articles was Peter A. Diamond of MIT. Two of them, written in  1971, were about “how the tax system can be tuned to minimize distortions and disincentives, and eliminate production inefficiencies,” the committee said.

Notably, Dimond, 70, shared last year’s Nobel Memorial Prize in Economics.

However, last year also saw Diamond’s nomination by President Obama to become a member of the Federal Reserve Board blocked by the ranking minority member of the Senate Banking Committee, Republican Richard Shelby of Alabama, on the grounds that he was not an expert on monetary policy.

“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,” Shelby said in a statement.

Nor does a committee of six economists chosen by the editor-in-chief of the AER, Robert Moffitt of Johns Hopkins University. On the other hand, the committee did itself include three Nobel laureates, Robert M. Solow of MIT, Kenneth J. Arrow of Stanford and Daniel L. McFadden of the University of California at Berkeley. The others were Martin S. Feldstein of Harvard University, a chairman of the Council of Economic Advisers under President Ronald Reagan, B. Douglas Bernheim of Stanford and James M. Poterba of MI.

Diamond’s nomination died at the end of the last Congress and Obama has resubmitted it. Shelby should drop his ridiculous opposition, particularly with the Fed Board about to be down to five members again with the announced resignation of Gov. Kevin M. Warsh effective late next month. 

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covered the Federal Reserve and the economy for 25 years at the Washington Post before joining Bloomberg News in 2004. In 2009 he began writing freelance pieces for, among others, Thomson Reuters, and is widely recognized for his ability to interpret the Fed.