Posted on 10/11/2010 7:19:01 AM PDT by WebFocus
One of President Obama's stalled nominees to join the Federal Reserve's Board of Governors won a share of the Nobel Prize in economics on Monday.
Peter Diamond, a professor at the Massachusetts Institute of Technology (MIT), received the award along with Dale Mortensen of Northwestern University and Christopher Pissarides of the London School of Economics "for their analysis of markets with search frictions," according to the Nobel committee's citation.
Obama announced his intention to nominate Diamond as a governor of the Federal Reserve Board in late April. The Senate Banking Committee approved his nomination, along with several other nominees, in late July, but Diamond's nomination stalled before moving to a vote for full confirmation.
The ranking member of the Banking Committee, Sen. Richard Shelby (R-Ala.), exercised a procedural maneuver to send Diamond's nomination back to the White House, forcing President Obama to renominate the MIT professor, according to an account by The New York Times.
Shelby objected to Diamond's nomination to the Federal Reserve, which controls monetary policy in the United States, for lack of experience in macroeconomics.
More here :
EXCERPT
3 win economics Nobel for job market analysis
By LOUISE NORDSTROM and KARL RITTER (AP)
STOCKHOLM — Two Americans and a British-Cypriot economist won the 2010 Nobel economics prize Monday for developing a theory that helps explain why many people can remain unemployed despite a large number of job vacancies.
Federal Reserve board nominee Peter Diamond was honored along with Dale Mortensen and Christopher Pissarides with the 10 million Swedish kronor ($1.5 million) prize for their analysis of the obstacles that prevent buyers and sellers from efficiently pairing up in markets.
Diamond — a former mentor to current Federal Reserve chairman Ben Bernanke — analyzed the foundations of so-called search markets, while Mortensen and Pissarides expanded the theory and applied it to the labor market.
Since searching for jobs takes time and resources, it creates frictions in the job market, helping explain why there are both job vacancies and unemployment simultaneously, the academy said.
“The laureates’ models help us understand the ways in which unemployment, job vacancies and wages are affected by regulation and economic policy,” the citation said.
Diamond, 70, is an economist at the Massachusetts Institute of Technology, and an authority on Social Security, pensions and taxation.
President Barack Obama has nominated Diamond to become a member of the Federal Reserve. However, the Senate failed to approve his nomination before lawmakers left to campaign for the midterm congressional elections.
So now you have to ask yourself if this is an attempt by the Nobel committee to advocate for the Administration.
I haven’t read this guy Diamond, and I probably won’t...But what do you wanna bet that he’s as accurate as Krugman?
No way in bel. Or perhaps, Norway in Hell. Thanks WebFocus.
Here’s a quick look at Peter Diamond (I’m sure you know that Wikipedia is not always accurate, but anyway...):
http://en.wikipedia.org/wiki/Peter_A._Diamond
From what I read, Diamond wrote a paper in the early 1980’s saying that unemployment benefits lead to better job matches. The assumption is that job selectors would be more “selective” in their job searches without having to worry about immediate financial needs. (Of course leaving out the assumption that job seekers may not be that keen in getting a job in the first place).
I meant job SEEKERS would be more selective, not selectors
Co-authored with Orzag....Ok. He’s a loser.
As I said...
If you read the synopsis of the articles, particularly Diamond and Mirrlees (1971) – “Diamond-Mirrlees Efficiency Theorem”, you can see the irrational assumptions...
“Diamond and Mirrlees examine a situation in which the government requires a revenue raised by taxes but lump-sum taxation, and therefore a first-best Pareto optimal allocation of resources, is unavailable. However, if there are no other distortions in the economy (e.g. externalities), if firms are characterised by constant returns to scale and if the government can set the vector of indirect consumption taxes independently of production prices then it is optimal to have productive efficiency in the economy. This implies that there should be no taxes on intermediate goods and imports.”
...and those irrational assumptions of course lead to irrational conclusions.
“The key idea is that when the government can control all consumer prices, the producer prices are disconnected from the consumer prices and the consumption decision part of the optimal taxation problem becomes independent of the production decision.[10]”
Loser.
So he’s not Harvard Stupid, he’s Yale Stupid. I have a hard time separating the two.
The assumption is also that the firms don’t change their behavior at all and that revenue is constant.
Riiight.
If he’s from MIT and ‘trained’ in Economics - he’s dangerous. MIT economists worked very closely to create what became the mASS. healthcare plan. Which has crashed and burned just as everyone with a brain and understanding of economic fundamentals predicted. A friend’s son was PhD candidate at MIT - and as a comoplete moonbat on the subject - his response to what happened is that the media lies about the success of the plan. He is off making money ‘hand over fist’ from ‘developing’ countries designing social programs modeled on the “mASSachusets miracle’.
He totally believes the government should control all economic decisions.
RE: So he’s not Harvard Stupid, he’s Yale Stupid. I have a hard time separating the two.
LOL, pretty soon MIT will be added to your list. He got his PhD from MIT. And oh yeah, he also taught at UC Berkeley ( where the honorable Robert Reichhhhhhhhh now teaches).
I respect MIT for it’s achievements in the technical sciences...
But the economics being practiced at Yale, Harvard, yes, MIT and OMG yes at Berkeley is akin to alchemy. It’s not even psuedoscience. It’s advanced shamanism at best.
And yes, Berkeley Stupid is a brand new special kind of stupid.
Gig’em, Ags.
Sheesh, these people are dangerous.
It seems to me that liberal models of anything break down when it comes to assigning value to choices that are not readily measurable. I don't understand that because there is plenty of historical data relative to corporate and individual behavior to extrapolate and properly weight the things that are of real value. The choices historically made are based on circumstances and human nature. T think that liberals replace what was with what they think it should be. The liberals "reasonable man" is in most respects not reasonable at all.
Fire away...
‘These people’ are nearly done building the new world order machine. All that remains is to finally crasht he American economic engine. ... And still no one is building the needed guillotines!
I won’t shoot you for that intelligent comment.
You’re generally right.
The Left’s argument is an essentially emotional argument for what they think life should be, how people should behave.
They never bother with the inductive approach, either.
Human Action by Ludwig von Mises, however, explains that its much more important to try to deduce how people react in these various systems...and that all of these decision variables come down to individual choices.
The Left ignores the works of people like Mises, Hazlitt, Hayek, and Bastiat simply because it does not have the emotionally satisfying outcomes they are seeking to promote.
“The assumption is that job selectors would be more ‘selective’ in their job searches without having to worry about immediate financial needs.”
We all know what actually happens, though. Welfare recipients wait around for a few months doing nothing until immediate financial needs pop back up.
I know better now, but as you stated the formula has to be based on reality not some liberal fantasy.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.