posted 10-11-2010 08:06 PM                  

Peter Diamond, a 70-year-old economist at MIT, just won the Nobel Prize in Economics. Yes, that's the same Peter Diamond whom President Obama appointed to the Federal Reserve in April and whose confirmation Republicans have blocked.

It's not clear which Republican or Republican senators are stopping his nomination at this point, as he's the victim of one of those infamous anonymous holds. But two leading suspects are Jim Bunning and Richard Shelby, both of whom voted against Diamond's nomination in committee and the latter of whom has raised questions about Diamond's qualification.

Shelby has acknowledged that Diamond is a "skilled economist" but has said he wonders whether Diamond has sufficient expertise in monetary policy--even though three sitting Fed governors, including two appointed by Republicans, aren't even economists.

Who is Diamond? He's among the country's most respected economists, as you might expect. According to the New York Times, he won the prize--which he shares with two other economists, Dale T. Mortensen and Christopher A Pissarides--for research on how markets break down when buyers and sellers have trouble finding each other.

A particular focus is labor markets and, I gather, Diamond later produced a key paper on unemployment that happens to be very relevant today. As (fellow Nobel winner) Paul Krugman wrote a few weeks ago:

Right now one of the hot topics is whether the apparent shift in the Beveridge curve signals a rise in structural unemployment--and Diamond wrote the seminal paper on the whole subject--the top result on Google scholar.

Diamond has been a staunch defender of social insurance and, during the late 1990s, collaborated with future-OMB director Peter Orszag on a proposal to maintain the program's solvency without privatization. He also wrote an article about Social Security for TNR. It's now available in the magazine's archive.

Maybe that's why some Republicans are out to get him. Or maybe his stellar intellectual qualifications and potentially unique insights into our economic situation simply don't matter to them.

Update: I've added some more background details on both Diamond's confirmation saga and his intellectual background. Here's more on that, from Alex Tabarrok:

The 2010 Nobel Prize awarded to Peter A. Diamond, Dale T. Mortensen, Christopher A. Pissarides can be thought of as a prize for unemployment theory.

A key breakthrough was to realize that the problem was not how to explain unemployment per se but rather how to explain hiring, firing, quits, vacancies and job search and to think of unemployment as theresult of all of this underlying microeconomic behavior. Notice that the underlying behavior involves not just workers looking for jobs but also employers looking for workers so explaining unemployment would require a theory of job search, worker search and matching and each aspect of the theory would have to be consistent with every other aspect; i.e. how much workers search depends on how much employers are searching (e.g. advertising) and vice-versa and also on the quality of matching and all of these considerations need to be addressed together. It was Mortensen and Pissarides in particular, building on work by Diamond, who built just such a consistent model.

I think of Diamond as the classic MIT economist, especially of the earlier, pre-Acemoglu generation. Lots of theoretical rigor, though sometimes his theory pieces don't have a simple or simply analytic punchline. There is greater concern with risk, and stability conditions, than you would see in a Chicago theory paper. There is a strong emphasis on the ability of government to implement welfare-improving schemes of the sort found in social democracies. The approach is quite technocratic -- solve and advise. Public choice and political economy considerations take a back seat. High IQ. Of the MIT economists, he has done the most to pursue the Samuelson tradition of having a universal method and very broad interests. His papers remain central to public finance, welfare economic, intermteporal choice, search theory, macroeconomics, and other areas. His policy impact on social security has been significant.

posted 10-11-2010 09:42 PM                  

"There is greater concern with risk, and stability conditions, than you would see in a Chicago theory paper.

There is a strong emphasis on the ability of government to implement welfare-improving schemes of the sort found in social democracies.

The approach is quite technocratic -- solve and advise. "

Just bringing Chicago into the rhetoric,,,I would block his confirmation also!

We don't need welfare-improving schemes. More like, do away of much of the loses, and chase out the cheaters!

When has the government solved and advised on anything other than costing the tax payers more $$$?

posted 10-11-2010 11:08 PM                  

quote:

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Originally posted by ed monahan:
This guy won the Nobel prize, he must be totally qualified. After all, Obama won a Nobel prize.
Give me a break.

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And let's not forget Yasar Arafat, Al Gore and Jimmy Carter also won a Nobel Prize.

posted 10-11-2010 11:25 PM                  

The Nobel Prize is an often-politicized award that is criticized for increasing evidence of bias and possibly even corruption. It has been ostensibly given for achievements in physics, chemistry, medicine or physiology, literature, and peace. Named in honor of Alfred Nobel, the first prize was granted in 1901. He would state, "To the person who shall have done the most or the best work for fraternity between the nations and the abolition or reduction of standing armies and the formation and spreading of peace congresses." The award for economics, the "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel," was added in 1969 and is sometimes called a Nobel Prize.

As an unwritten rule, the award is not given to a conservative (such as Ronald Reagan or Pope John Paul II) or scientists advocating intelligent design, and it is not given to anyone who challenges the scientific establishment on the issues of the theory of evolution or theory of relativity, such as standouts Raymond Damadian, Fred Hoyle and Robert Dicke. The Nobel Prize is not given to any scientist who criticizes, publicly or privately, a liberal icon; Edward Teller was denied the prize for criticizing the liberal J. Robert Oppenheimer, and John Wheeler was denied the prize for privately supporting Teller.

The award has repeatedly been granted in way to insult a disfavored scientist by honoring a less deserving person for the same achievement. The insult is enhanced by giving the typically three-person shared award to only two recipients, creating an embarrassing omission for the third, as in the case of the awards that should have gone to Fred Hoyle and Raymond Damadian.

Frequently the award is given as a reward to a liberal politician or diplomat, such as Al Gore, given at a time to possibly boost his agenda. Most recently the award has been the subject of an investigation for corruption.

Bias Against Conservative and Nationalist Achievers

Ronald Reagan
Ronald Reagan is widely credited for causing the peaceful elimination of short-range nuclear weapons in Europe, for demanding the destructions of the Berlin Wall, and for the end of communist control over Eastern Europe. He stood for freedom at every opportunity. He lived for more than a decade after his achievement, yet the Nobel Peace Prize was repeatedly given to liberal figures who accomplished far less, including even the person Reagan defeated, Jimmy Carter.

Pope John Paul II
Frequently the Nobel Peace Prize is given to non-Christian or liberal Christian religious leaders, but it refused to honor Pope John Paul II for his pivotal role in liberating his native Poland from communist control.

Edward Teller and John Wheeler
Edward Teller was a brilliant physicist who became hated by liberals for developing the hydrogen bomb, for not supporting a security clearance for the leftist icon and communist fellow traveler J. Robert Oppenheimer, and advocating a strong defense against communism. Teller won numerous prestigious scientific awards, but was denied the Nobel Prize and many felt it was for political reasons:

He blamed politics and the fact he was known as the "father of the hydrogen bomb." His protégé, Lowell Wood at Livermore, said that if it were not for the bomb "chances are two to three he'd get the Nobel Prize. He's commented to me that if he reared up on his hind legs and denounced the U.S. government, he'd be a good candidate."
John Wheeler was denied the prize for privately supporting Teller.[5]

Mahatma Gandhi
Mahatma Gandhi was a nationalist opposed to international law and a form of globalism, which the people controlling the Nobel Prize oppose. Gandhi was nominated 12 times for the Nobel Peace Prize but never granted it. The Nobel Foundation has an information page detailing his nominations and the potential reasons for his lack of success.
The omission has been publicly regretted by later members of the Nobel Committee; when the Dalai Lama was awarded the Peace Prize in 1989, the chairman of the committee said that this was "in part a tribute to the memory of Mahatma Gandhi".
Up to 1960, the Nobel Peace Prize was awarded almost exclusively to Europeans and Americans. In retrospect, the horizon of the Norwegian Nobel Committee may seem too narrow. Gandhi was very different from earlier Laureates. He was no real politician or proponent of international law, not primarily a humanitarian relief worker and not an organiser of international peace congresses. He would have belonged to a new breed of Laureates.
Bias Against Scientists Who Criticize Liberal Theories
Raymond Damadian
Raymond Damadian developed magnetic resonance imaging (MRI), a phenomenal medical innovation deserving of a Nobel Prize. But Damadian is reportedly a Young Earth Creationist, and the Nobel committee never recognizes the achievements of someone who criticizes the theories of evolution and an old earth. Accordingly, the Nobel committee insulted Damadian by passing him over and giving the the Nobel Prize in Physiology or Medicine in 2003 to Paul Lauterbur and Peter Mansfield "for their discoveries concerning magnetic resonance imaging".

Damadian, who had outlined the use of Nuclear Magnetic Resonance to detect tumors in 1971, protested against his omission from the Prize and said that his "life's work has been stricken." He then took out full-page ads in several newspapers, describing his omission as a "shameful wrong". The first wave of ads appeared in The Washington Post, the Los Angeles Times, Dagens Nyheter (daily newspaper in Stockholm), and The New York Times.

Fred Hoyle
The foremost British scientist of the 20th century, Fred Hoyle, was inexplicably passed over for a Nobel Prize. It was awarded to William Alfred Fowler (with Subrahmanyan Chandrasekhar) for "for his theoretical and experimental studies of the nuclear reactions of importance in the formation of the chemical elements in the universe". Fowler had done much of his work under the direction and leadership of Hoyle, and it was in fact the apparent 'fine-tuning' of the physical constants involved that had led to Hoyle abandoning his original atheistic viewpoint. The prize was awarded at a time when Fred Hoyle was embarrassing evolutionists by exposing the archaeopteryx at the British Museum of History as a fraud. The slight of Hoyle seemed to be a punishment for his criticism of the theory of evolution, which he rejected later in his career, having been indoctrinated as an atheist earlier in his life.

Robert Dicke
Perhaps the foremost American physicist of the 20th century, Robert Dicke of Princeton University was a prominent critic of the theory of relativity. Dicke supported an alternative theory that had "enjoyed a renaissance in connection with theories of higher dimensional space-time."

But despite being one of the most accomplished physicists having numerous contributions, Dicke was repeatedly passed over for the Nobel Prize. In one egregious case, the prediction and discovery of cosmic background radiation from the Big Bang, the prize was embarrassingly given to less deserving scientists. The Nobel Prize committee has often given the award in this manner as away of punishing someone more deserving for criticizing a theory preferred by the committee.

Biased Awards
Equally there have been several instances where prizes were awarded to those whom many felt did not deserve the honor. Controversy in this regard has been especially acute in the award of the Peace Prize. When Henry Kissinger was awarded the prize in 1973 the American satirist, Tom Lehrer, observed that this had rendered political satire 'obsolete'. Many were outraged by the award to Yasir Arafat in 1994, who was reportedly associated with the Munich massacre of Jewish athletes in 1972. Further politicization of the award occurred in 2007 when Al Gore was given the peace prize for promoting the dubious theory of man-made Global Warming, a political agenda that has no clear connection with "peace".

Bias is facilitated by the haste in awarding The Peace Prize, which in Gore's case seemed to be timed to boost a potential presidential campaign. The Peace Prize has often been awarded only a year or so after the political events that have merited the award, and often well before the long term consequences of those events have become clear (and Arafat's award is particularly controversial in this respect).

Continuing with the trend of awarding Peace Prizes to the undeserving, Barack Hussein Obama was awarded one in 2009.

Does Obama deserve the Nobel Peace Prize? Barack Obama has been awarded the 2009 Nobel Peace Prize for his "extraordinary" diplomatic efforts. But after less than a year in office does the US president deserve the award? Is the decision a clever political move by the Nobel committee? Will it help or hinder Obama's presidency?

Deserved Peace Prize Recipients
Some praise the Nobel Peace Prizes given in 1991 to Aung San Suu Kyi for her heroic struggle against the brutal military dictatorship in Myanmar (Burma) and the award in 1996 to Jose Ramos Horta and Bishop Belo of East Timor in recognition of their struggle against the oppressive and, at times, genocidal occupation of that country by the Indonesian government. The awarding of the prize in 1984 to Archbishop Emeritus Desmond Tutu, was condemned by the apartheid regime as a political ploy, but celebrated everywhere else, as was the joint award to Presidents Nelson Mandela and F.W. de Klerk in 1993, for their efforts in uniting South Africa in the build-up to the first fully democratic elections.

Anti-American bias in Literature award
In 2008, Horace Engdahl, the head of the Swedish Academy, was reported to have said that American novelists would never win the Nobel Prize for Literature, as the American novel was "too isolated and insular."