WASHINGTON — Sen. Richard Shelby on Tuesday pressed President Obama to withdraw his nomination of Peter Diamond to serve as a member of the Federal Reserve Board.
During a nomination hearing before the Senate Banking Committee, Shelby remained in staunch opposition of the nominee, a professor at the Massachusetts Institute of Technology and Social Security expert, laying out the case, once again, against his confirmation.
"Mr. Diamond's background clearly demonstrates that he is not the right person for this particular job," said Shelby. Diamond was nominated by the president in April 2010, but was not confirmed last year after Republicans raised concerns regarding his qualifications to serve as a Fed governor.
Shelby said any qualified candidate should have experience in at least one area of the Fed's responsibilities, including conducting monetary policy, supervising our financial system, and responding to financial crises.
"Let's examine Dr. Diamond's experience in each of these areas. Does Dr. Diamond have any experience in conducting monetary policy? No. Does Dr. Diamond have any experience in bank management or supervision? No. Does Dr. Diamond have any experience in crisis management? No," said Shelby.
But, that's not all that worries Shelby, who pointed to an array of Diamond's policy positions.
Diamond has supported bailing out big banks, President Obama's $800 billion stimulus package, higher taxes to fund Social Security, and the Fed's second round of quantitative easing, Shelby said.
"In short, Dr. Diamond is an old-fashioned, big government Keynesian," said Shelby. "Many of us believe that this is not the economic philosophy the Fed should be embracing at this point in our economic history.
Perhaps, even more importantly, Shelby said Diamond is "legally not eligible to serve."
Under Section 10 of the Federal Reserve Act, two board members cannot come from the same Fed district. Diamond and [Fed Governor Daniel] Tarullo both are listed as coming from the state of "Massachusetts" in their nomination papers.
"We can debate the wisdom and historical application of this requirement at a later date, but, for now, it is the law even if prior Congresses have chosen to look the other way," said Shelby.
