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FreedomWorks is a leading grassroots organizing fighting for lower taxes, less government and more freedom. I am writing to urge you to oppose President Obama’s nomination of Peter Diamond to become a Member of the Federal Reserve Board of Governors. While Peter Diamond did win the Noble Prize in economics, as Paul Krugman did, this should not be the deciding factor when considering a nominee. I urge you to take a serious look at his troubling policy positions that he has taken throughout his career.
Professor Diamond has a strong Keynesian tendency to support policies that rely on government intervention rather than the private sector. He has continued to advocate for additional Federal “stimulus” and more bailouts of state governments. Diamond has urged Congress to extend unemployment benefits and raise taxes to supposedly boost job growth. In a 1991 New York Times op-ed titled “Health Care for Everyone”, Diamond alleges that the federal government could achieve universal health care coverage simply by assigning people to groups based solely on where they live. While Diamond has virtually no record on monetary policy, his fiscal policy suggests that he sees government spending as an economic remedy which poses a direct threat to monetary policy prudence.
In the face of rising oil and food prices, Diamond has expressed no real concern over inflation. On November 30, he told Bloomberg News that “the quantitative easing is a help but it needs fiscal backing. Given the other things happening, it’s not as powerful as we need.” The ramifications of engaging in overly loose monetary policy are hugely negative, affecting both domestic and global markets. Members of the Federal Reserve Board of Governors who are inclined to support activist government involvement in the economy through strong fiscal measures may be sorely tempted to provide correlative monetary stimulus.
Diamond’s predisposition for government-directed solutions to private-sector challenges does not bode well for increasing the productive output of America’s economy—and warns against the validity of his judgment as a prospective Federal Reserve Board member. Genuine prosperity cannot be forged at the expense of monetary integrity. I urge you to oppose the nomination of Peter Diamond to become a member of the Federal Reserve Board of Governors.
President and CEO
[Click here for a pdf version of this letter.]