Way back in April 2010, Obama nominated three economists to fill out empty seats on the Federal Reserve’s board of governors. Two sailed through, but one, Peter Diamond, was snared in the net of the Senate, where Republican Richard Shelby was unconvinced of the Nobel-winner’s monetary bona fides. After a long back-and-forth, Diamond withdrew in June 2011, some six months after yet another spot on the Fed had been vacated. The result: For the better part of a year, there’s been two empty seats at the central bank and no candidates to fill them. On Tuesday, President Obama named two candidates to fill these spots: Harvard economist Jeremy Stein, who served the current Administration at the Treasury Department in 2009, and Jerome Powell, a former undersecretary for domestic finance under George H.W. Bush.
The Journal has the story and there’s already some commentary on the merits of the picks, but one thing that shouldn’t go unmentioned is this: The economy remains fragile, fiscal policy is still mired in Congress and the Euro crisis looms large over the U.S. recovery. That puts a lot of weight on American monetary policy at this particular moment and it’s amazing that Obama went so long without filling vacant spots on the board, even if decision-making ultimately falls to chairman Ben Bernanke. We’ll find out more about Stein and Powell’s monetary policy positions during their Senate confirmation hearings, which should prove easier than what Diamond faced. In the mean time, it’s news enough that someone’s finally been nominated.