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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (163855)	6/5/2011 11:36:53 PM
From: Win Smith	Read Replies (1) \| Respond to of 541936

When a Nobel Prize Isn’t Enough nytimes.com [ Speaking of the fed, the short answer to the above question is when you have to be confirmed by the congenitally idiotic Republicans in the Senate. What a bunch of clowns. ] By PETER A. DIAMOND Lexington, Mass. LAST October, I won the Nobel Prize in economics for my work on unemployment and the labor market. But I am unqualified to serve on the board of the Federal Reserve — at least according to the Republican senators who have blocked my nomination. How can this be? The easy answer is to point to shortcomings in our confirmation process and to partisan polarization in Washington. The more troubling answer, though, points to a fundamental misunderstanding: a failure to recognize that analysis of unemployment is crucial to conducting monetary policy. In April 2010, President Obama nominated me to be one of the seven governors of the Fed. He renominated me in September, and again in January, after Senate Republicans blocked a floor vote on my confirmation. When the Senate Banking Committee took up my nomination in July and again in November, three Republican senators voted for me each time. But the third time around, the Republicans on the committee voted in lockstep against my appointment, making it extremely unlikely that the opposition to a full Senate vote can be overcome. It is time for me to withdraw, as I plan to inform the White House. The leading opponent to my appointment, Richard C. Shelby of Alabama, the ranking Republican on the committee, has questioned the relevance of my expertise. “Does Dr. Diamond have any experience in conducting monetary policy? No,” he said in March. “His academic work has been on pensions and labor market theory.” But understanding the labor market — and the process by which workers and jobs come together and separate — is critical to devising an effective monetary policy. The financial crisis has led to continuing high unemployment. The Fed has to properly assess the nature of that unemployment to be able to lower it as much as possible while avoiding inflation. If much of the unemployment is related to the business cycle — caused by a lack of adequate demand — the Fed can act to reduce it without touching off inflation. If instead the unemployment is primarily structural — caused by mismatches between the skills that companies need and the skills that workers have — aggressive Fed action to reduce it could be misguided. In my Nobel acceptance speech in December, I discussed in detail the patterns of hiring in the American economy, and concluded that structural unemployment and issues of mismatch were not important in the slow recovery we have been experiencing, and thus not a reason to stop an accommodative monetary policy — a policy of keeping short-term interest rates exceptionally low and buying Treasury securities to keep long-term rates down. Analysis of the labor market is in fact central to monetary policy. Senator Shelby also questioned my qualifications, asking: “Does Dr. Diamond have any experience in crisis management? No.” In addition to setting monetary policy in light of a proper understanding of unemployment, the Fed is responsible for avoiding banking crises, not just trying to mop up afterward. Among the issues being debated now is how much we should increase capital requirements for banks. Selecting the proper size of the increase requires a balance between reducing the risk of a future crisis and ensuring the effective functioning of financial firms in ordinary times. My experience analyzing the properties of capital markets and how economic risks are and should be shared is directly relevant for designing policies to reduce the risk of future banking crises. Instead of going to the Fed, however, I will go about my congenial professional existence as a professor at M.I.T., where I have taught and researched since 1966, and I will take advantage of some of the many opportunities that come to a Nobel laureate. So don’t worry about me. But we should all worry about how distorted the confirmation process has become, and how little understanding of monetary policy there is among some of those responsible for its Congressional oversight. We need to preserve the independence of the Fed from efforts to politicize monetary policy and to limit the Fed’s ability to regulate financial firms. Concern about the (seemingly low) current risk of future inflation should not erase concern about the large costs of continuing high unemployment. Concern about the distant risk of a genuine inability to handle our national debt should not erase concern about the risk to the economy from too much short-run fiscal tightening. To the public, the Washington debate is often about more versus less — in both spending and regulation. There is too little public awareness of the real consequences of some of these decisions. In reality, we need more spending on some programs and less spending on others, and we need more good regulations and fewer bad ones. Analytical expertise is needed to accomplish this, to make government more effective and efficient. Skilled analytical thinking should not be drowned out by mistaken, ideologically driven views that more is always better or less is always better. I had hoped to bring some of my own expertise and experience to the Fed. Now I hope someone else can. Peter A. Diamond is a professor of economics at the Massachusetts Institute of Technology.

To: Wharf Rat who wrote (163855)	6/6/2011 10:20:33 AM
From: Wharf Rat	Respond to of 541936

Snorting Koch causes brain damage... Are Your Solar Panels Breeding Bolsheviks? Tea Party Congress Targets National Renewable Energy Lab (NREL) By Joe Romm on Jun 6, 2011 at 8:18 am Peter Sinclair pens this guest post, his “Climate Denial Crock of the Week.” The Tea Party congress hates new energy, hates the idea that the nation could be weaned off its oil dependence, or fossil fuels. They hate renewable energy because their primary sponsors in the fossil fuel industry want above all to slow progress on that front, and drag the nation back into the 19th century [see the CP post, "Video proof David Koch, the polluting billionaire, pulls the strings of the Tea Party extremists"]. We’ve seen a number of examples of this over recent months, now the anti-science crusade continues. Lead by Rep. Doug Lamborn (R-CO), 9 members of congress have now asked for the closure of the National Renewable Energy Laboratory in Golden, CO. The Denver Post reported this amazing story Saturday: The lawmakers ask that funding in the 2012 budget be eliminated for the Department of Energy’s Office of Science and Office of Energy Efficiency and Renewable Energy programs because they “have failed to live up to their supposed potential.” Democratic U.S. Rep. Ed Perlmutter, who represents the district in which the national lab is located, has said the facility generates 5,500 jobs. “NREL is a crown jewel in the world of renewable energy,” said Les lie Oliver, a spokeswoman for Perlmutter. “It’s providing a lot of jobs; those are things we need to be fostering.” According to an analysis by the University of Colorado, the lab provides a $714 million annual boost to the state’s economy. The letter, written by California U.S. Rep. Tom McClintock IR-CA), says: “We should not follow the president’s poor planning in increasing the funding for these anti-energy boondoggles.” By “boondoggle”, apparently he means wind energy, which has made up more than a third of new US capacity over the last several years, and is currently coming in competitive with, or cheaper than, coal in most areas of the country, or solar energy, which is now the fastest growing industry in the US. Here American Wind Energy Association President Denise Bode kicks ass and takes names as Fox News “personalities” try to spread more disinformation about renewable energy: Rep. Lanborn is following a script similar to Rep. Darrell Issa, the Republican Chairman of the House Committee on Oversight and Government Reform, who recently wrote that support for “so-called clean energy” is “not good for the United States.” – Peter Sinclair. This was first posted at his Climate Denial Crock of the Week. [Joe Romm adds: I was acting assistant secretary of energy for energy efficiency and renewable energy in 1997, overseeing NREL. It is one of our great scientific and technological institutions, responsible for what leadership in clean energy technologies the United States still maintains. Shutting it down would truly be cutting off our nose to spite our face. Clean energy will be one of the biggest job creating industries of the next several decades as we simultaneously fight peak oil and human-cause global warming. We need NREL now more than ever.] thinkprogress.org