WASHINGTON, Oct 11 (Reuters) - This is a daily newsletter about politics and economics in Washington, compiled by Bureau Chief Simon Denyer and sent to subscribers by email late in the day. To be added to the mailing list, please email us at washingtonextra@thomsonreuters.com.
After irking the Chinese with the award of the Nobel peace prize last week, the Nobel committee set a few feathers flying in Washington today by awarding the economics prize to Peter Diamond, an MIT professor who has also been nominated by President Barack Obama for a spot on the Board of Governors of the Federal Reserve.
Diamond's nomination to the Fed job has been held up by Senate Republicans who have questioned his qualifications. At the time Richard Shelby, the most senior Republican on the Senate Banking Committee said the current uncertain environment would not benefit from board members deciding monetary policy "who are learning on the job" and told Reuters Diamond was a "behavioral man" who had no background in monetary policy and the economy.
It is probably a little conspiratorial to suggest the Nobel committee was deliberately tweaking Republican noses by recognizing Diamond along with two other leading economists for their work in helping to explain unemployment and jobs markets. Nevertheless, critics are bound to seize on this, along with Obama's peace prize last year and Paul Krugman's economics prize in 2008, to draw their own conclusions.
The White House wasted no time in making political capital from the award, with Obama urging speedy confirmation so Diamond could bring his "extraordinary expertise" to the Fed job. Spokesman Robert Gibbs said blocking Diamond was a "harmful attempt to score political points that hurts our middle class and our broader economic recovery."
Shelby was unbowed. "While the Nobel Prize for Economics is a significant recognition, the Royal Swedish Academy of Sciences does not determine who is qualified to serve on the Board of Governors of the Federal Reserve System," he said.
Diamond told a press conference he had no plans to withdraw his name from consideration for the Fed job, and just for good measure said the United States needed a second stimulus bill to help stem the deepening problem of local government job losses. Washington Extra is looking forward to the nomination hearings.
Here are our top stories from Washington:
Foreclosure halt could hit investors
A U.S.-wide foreclosure moratorium could penalize investors and make new home loans more expensive and harder to obtain, an investor group and industry experts warned. While homeowners may cheer efforts to get tough with banks, an increasing number of analysts warn that a blanket ban on foreclosures could further hobble the economy. [ID:nN11121582]
Obama hammers Republicans after Fed pick wins Nobel
President Obama seized on the award of the Nobel prize in economics to his pick for the Federal Reserve to ratchet up pressure on Senate Republicans, who have blocked the confirmation. Peter Diamond's nomination is among dozens the White House says are being held up in the Senate. [ID:nN11127657]
Nobel winner Diamond says U.S. needs second stimulus
Peter Diamond, a 2010 Nobel economics prize winner who has been nominated to the Federal Reserve board, said a second stimulus bill would help stem the deepening problem of local government worker job losses. [ID:nN11118781]
US decision on China yuan practices looms again
President Obama faces a deadline on Friday on whether to formally declare for the first time that China undervalues its currency, following a vote in Congress to get tough with Beijing. An IMF meeting last weekend failed to defuse tensions between China and some developed countries, including the United States, that are pressing Beijing to allow the yuan to appreciate. [ID:nN11183759]
In coal state, a Democrat keeps Obama at a distance
Democratic Governor Joe Manchin once seemed certain to win a Senate seat in coal-rich West Virginia, but voter anger over policies from climate change to healthcare are putting him in danger of losing. [ID:nN09267513]
Monetary policy's diminishing returns
The Federal Reserve runs the risk of diminishing returns from its next round of money printing, but that won't stop it from trying. [ID:nN07193334]
SCENARIOS-Republican election impact on climate control
Big gains in November could put Republicans in position to reverse Democrats' drive for climate control legislation. A Republican takeover of either chamber, or even large gains by Republicans, will make it harder for President Obama to win mandatory reductions of greenhouse gas emissions from smokestacks and tailpipes.
What to look out for on energy and climate policy for if Republicans win big here. [ID:nN11116619]
First patient treated in Geron stem cell trial
Doctors have begun treating the first patient to receive human embryonic stem cells, but details of the landmark clinical trial are being kept confidential. [ID:nN11175966]
For a factbox on the controversial stem cell issue, click here. [ID:nN11114949]
What we are blogging:
NY governor candidate Paladino says he only opposes gay marriage (and doesn't like the parades)
Carl Paladino, the Tea Party backed Republican running for New York governor, says he is not against homosexuals, only gay marriage and taking children to gay pride parades.
For Tabassum Zakaria's full post, click here: http://blogs.reuters.com/frontrow/2010/10/11/ny-governor-candidate-paladino-says-he-only-opposes-gay-marriage-and-doesnt-like-the-parades/
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