The Business On: Peter Diamond, Professor of Economics, MIT

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The Independent Online

What's his specialism?

Social security and the labour market – with two colleagues, he shared the Nobel Prize for Economic Sciences last year for his work on employment markets in the US.

He sounds like a useful man to have around just now

Indeed. US unemployment remains above 9 per cent, despite America's economic recovery – and is even higher in many parts of the country. Many other countries, including the UK, have similar difficulties with rising joblessness.

Why hasn't President Obama signed him up, then?

He's tried. Last year, the White House nominated Mr Diamond for one of several vacancies on the board of the US Federal Reserve. He ought to have few problems getting on with Ben Bernanke, the Fed's chairman, who was once one of his students.

Excellent. So when does he start?

He doesn't. Republican members of the Senate Banking Committee have repeatedly blocked his appointment. On Sunday, Mr Diamond succumbed to the inevitable, announcing his withdrawal as a nominee.

What have the Republicans got against him?

Richard Shelby, the man leading the campaign to prevent Mr Diamond getting the job, says he lacks monetary policy experience. Most neutral bystanders suspect a more important factor is that Mr Diamond is the President's man.

Isn't that rather petty?

Yes, though the Republicans might point to similar tactics by Democrats on the banking committee when President Bush was in power. Mr Shelby is also worried about the Fed appointing governors sympathetic to President Obama's policy of holding off on deficit reduction until the recovery is secured.

What does Mr Diamond say?

He's a pretty mild-mannered type, so he's choosing his words carefully. But he announced his withdrawal in an op-ed piece for The New York Times that was entitled "When a Nobel Prize isn't enough". Clearly, he's not a happy bunny.