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Liberal Economist Peter Diamond Withdraws from Contention for Federal Reserve

MIT's Peter Diamond has withdrawn his nomination to the Board of Governors of the Federal Reserve System. I earlier explained how Diamond's nomination by President Obama benefited from an ideological double-standard, and how his presence on the Board would have violated the regional-balance requirements of Section 10-1 of the Federal Reserve Act. Diamond's supporters note that he is a really smart guy, which is legally irrelevant, and also ignores the fact that Diamond "lacks relevant experience in crucial areas of Fed policy." It's also true that Diamond is an old-fashioned big-government liberal who supported the stimulus, inflationary monetary policy, bailouts, and the Fannie-Freddie model of GSEs. But his support for liberal big-government policies was hardly the only reason for opposing him, and his supporters' failure to address the legal objections to his nomination, like Section 10-1 of the Federal Reserve Act, is quite telling.