The big news of the day is Peter Diamond withdrawing his name for a seat on the Fed. Matt Yglesias tweeted that "Obama's failure to get Fed seats filled in a timely way has been his biggest mistake." I certainly agree, although I suppose one could make a pretty strong argument for appeals court nominations (that is, Obama's failure to even bother nominating people to several open spots, along with his failure to put any pressure on the Senate to act on the few he did nominate). Or, we could just call it nominations in general.
Not that the Senate has covered itself in glory in this case. And not just the Republicans (led by Richard Shelby of Alabama, who completely failed to make a reasonable case against Diamond in my view). The Democrats could have moved despite Shelby's objections. Comity in the Senate is important, but it can't be a one-way street; there's simply no reason that the majority party should hesitate to move forward in this kind of case, where they had plenty of votes to confirm (last year) and even defeat a filibuster, and the objection from the minority wasn't something that could be settled by cutting a deal.
But really this comes down to Barack Obama. He's been terribly slow to appoint people to fill Fed vacancies, and as far as we know he did little to fight for those he did nominate. Or to do anything else; at the very least, if he wasn't prepared to spend presidential resources to push Diamond through, he should have put up another name in January this year, someone who could be confirmed. The system really is dysfunctional and could use some reform, but it sure looks, at least from what we know right now, that the main thing driving this is a failure of the president to place a sufficiently high priority on nominations in general and the Fed in particular.
It is somewhat odd for Matt (and I guess Jonathan) to identify as "Obama's biggest mistake" something which may not have had any practical consequences. Specifically, I don't really see any reason to believe that Bernanke hasn't been getting his way when it comes to Fed policy, nor that confirming Diamond would have resulted in a different set of policies.
ReplyDeleteI might note that of course Yellen and Raskin were both confirmed, and have been highly supportive of the Fed's policies under Bernanke. Which is good, but again not exactly evidence that confirming Diamond as well would have led to any changes in policy.