The Nobel Prize, the Senate, and the Fed

Peter Diamond is one of this year’s recipients of the Nobel Prize in Economics. Yet, his nomination for a position on the Federal Reserve Board of Governors has been blocked for months by Republican Senator Richard Shelby.

In the Nobel committee’s press release, it is noted that the economic models developed by Diamond and his fellow recipients “help us understand the ways in which unemployment, job vacancies, and wages are affected by regulation and economic policy.”

Shelby argues that Diamond is unqualified for a position on the Fed.

A few months ago, a Pulitzer prize was required to get Mark Fiore’s app on iTunes. Will it take a Nobel Prize to get Diamond on the Federal Reserve Board?

It’s rather hard to believe that this stupidity will prevail.

Education and Democracy

Edward Glaeser argues  in his Economix blog post today  that countries with high levels of education are much more likely to have strongly democratic insttutions.  While Thomas Jefferson made a similar argument a few centuries earlier, Jefferson’s econometric skills were a bit more limited.

In a political environment (and on an election day)  in which prevarication still seems to often be the norm, it is encouraging to think that continuing increases in human capital investment will help to improve political debate over time.   John Stuart Mill made a similar point in 1863:

It is better to be a human being dissatisfied than a pig
satisfied; better to be Socrates dissatisfied than a fool satisfied.
And if the fool, or the pig, are a different opinion, it is because
they only know their own side of the question. The other party to
the comparison knows both sides.

Good Economic News?

While the news of 3.5% growth in the third quarter of 2009 is encouraging, a full recovery is quite a ways off.  The most recent  national unemployment rate estimate is 9.8% (seasonally adjusted). As Krugman notes in his blog yesterday, at the current growth rate, it will take about a decade for the unemployment rate to return to something approximating full employment. A Taylor rule policy would keep the Fed at a near-zero interest rate target for the next 6 years.

Unless the pace of economic growth rises, it’s going to be a slow recovery. The last two recoveries were referred to as “jobless recoveries” because unemployment started to improve long after real GDP growth rose. If this occurs again, the economic climate may not feel much better for a while.

… and we wonder why economics is still called the dismal science…   It is, though, at least a bit less dismal than in the days of Ricardo and Malthus

The patient (or not so patient) time cost of medical care

Alan Krueger has an interesting 2/9/09 Economix blog post on the cost of patient time spent in acquiring medical care. His rough calculations, based on time use data from the American Time Use Survey, finds that this time cost (if measured at reasonable levels) would have added 11% to the total cost of medical care if this cost were included as part of U.S. medical costs.

Going green….

Sometime in the last few years, the Lifestyles Center at SUNY – Oswego began posting posting a one-page Toilet Talk: Words to Whiz By newsletter above the urinals throughout the SUNY-Oswego campus.  The current issue (printed on the college’s official hunter green color paper) has an article on the “green” initiative on campus. It notes that people are requested to reduce the printing and distribution of paper copies of materials that could be distributed in other means. I am going to assume that the irony of this was intentional.

Decline of OPEC?

The New York Times has an interesting article on the tensions that OPEC is experiencing under conditions of falling demand and rising supply from non-OPEC producers. Unless OPEC’s efforts to reach agreements with non-OPEC suppliers is successful, OPEC’s influence may very well decline.