WASHINGTON/NEW YORK (Mark Felsenthal and Kristina Cooke) – Nobel Prize winner Peter Diamond said on Sunday he planned to withdraw as a nominee for Federal Reserve governor, after his nomination was repeatedly opposed by Republicans.
“It is time for me to withdraw, as I plan to inform the White House,” Diamond, an economics professor at the Massachusetts Institute of Technology, wrote in an opinion piece published in the New York Times titled “When a Nobel Prize isn’t enough.”
The top Republican on the Senate Banking Committee, Richard Shelby, has criticized Diamond, saying he lacks monetary policy experience.
Diamond’s withdrawal, a recognition that Republican objections could not be overcome despite three committee votes approving him, leaves the White House with two vacancies to fill on the seven-seat Fed board as the central bank debates what to do about a weak economy recovery after its $600 billion bond buying program ends this month.
Diamond’s nomination fell victim to Republican score settling — under Democratic control, the Senate in 2008 blocked a nominee of Republican President George W. Bush. Another factor was a newly invigorated opposition to government and monetary intervention to stimulate economic growth during recessions.
The failure of the nomination of the MIT professor, an expert on pensions and behavioral economics, is also an indication of deep partisan divides over economic issues on Capitol Hill.