Federal Reserve Board Nominee Peter Diamond Withdrawals

By Douglas V. Gibbs

After a 14 month wait for a seat on the Federal Reserve Board of Governors, Peter Diamond has withdrawn, leaving the Obama administration frustrated, and the effectiveness of the Democrat President to be questioned.

Peter A. Diamond, a Nobel laureate, has been unable to reach the part of the process in his nomination that is a Senate vote because the Republicans have refused to allow it. On the same note, Democratic leadership did not press for a vote on the nomination, either, leaving Diamond no choice but to withdraw.

The Democrat's ability to lead is in question. The lack of leadership is leaving the party feeling defeated, unable to overcome Republican zeal.

The withdrawal by Diamond leaves two empty seats on the Federal Reserve's seven-member board, which is a part of the process of setting monetary policy. The position of vice chairman for supervision, created last year as a top bank regulatory post, also is vacant.

President Obama has not nominated a head for the Office of Comptroller of the Currency, which oversees national banks, or a new chairman for the Federal Deposit Insurance Corporation, which insures bank deposits and cleans up failed banks. There is no nominee to lead the new Consumer Financial Protection Bureau, or the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.

The Democrats blame the Republicans, but the Democrat Party's failure to push for a vote is also suspect.

Mr. Diamond in an article published Monday in The New York Times accused the Republicans of having little understanding of monetary policy. “Understanding the labor market — and the process by which workers and jobs come together and separate — is critical to devising an effective monetary policy,” he wrote.

The Republicans fully understand economics. It is the Democrat's blind faith in the proven failure of Keynesian economic theories that is the problem.

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Frustration Grows as Nominee for the Fed Withdraws - New York Times