More generous unemployment benefits give rise to higher unemployment and longer search times. – The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2010
“I have nominated Peter to the Board of Governors of the Federal Reserve to help bring his extraordinary expertise to our economic recovery,” Barack Obama said, referring to the most recent recipient of the Nobel Prize in economics.
But the monetary policy for which the Federal Reserve is responsible has little in common with the economic research conducted by MIT economist Peter Diamond. Focusing on fiscal policy throughout his long and distinguished career, Professor Diamond’s expertise is more appropriate in an environment like the National Economic Council that another instructor from a university in Cambridge recently vacated.
With three Americans who are among the unemployed, whose ranks have grown more than 26% during his administration, standing behind him glumly, Obama said, “Leaders in the Senate who are advancing a misguided notion that emergency relief somehow discourages people from looking for a job should talk to these folks.”
What would seem more likely to effect safety and happiness is for the Nobel Prize-winning economist, misguidedly nominated to the Federal Reserve, to talk to the ever more clueless Obama.