Central bank apathy

The term "political apathy" was thrown around quite a bit last week as a mix of faculty and students piled on as Dukies uninterested on politics. The Chronicle's print edition ran a number of good commentaries, including an insightful guest column by professor Gunther Peck. In order to make my bias clear, I must admit I did not vote. My explanation for inaction is relatively simple: I believe most politicians have at best an elementary understanding of America's debt woes, and consequently don't deserve my time.

While I won't bore you with details, let me be clear in saying America's budget deficit is far worse than most people care to believe. S&P openly discussed downgrading the United States' prized AAA credit rating several months ago. Since the housing crisis, the government has spent much, saved little and absorbed billions of private sector debt. Lest anyone forget, the Federal Reserve bought up $1.25 trillion of toxic mortgage backed securities (MBS) in a misguided attempt to lower interest rates and save the big banks. Now, the Fed is again buying debt in the form of US treasuries, a strategy that you'll hear referred to as "Quantitative Easing II" (QEII) on CNBC and other news outlets.

Other than Rand Paul, it seems very few politicians are concerned about Ben Bernanke and co., much less voters. I've heard many professors and students speak extensively about midterm elections and offer long-winded analysis; in contrast, few seemed to notice or care when the Fed announced last Wednesday that they would purchase roughly $600 billion of  Treasuries over the next year. This decision alone will likely affect the future of this country more so than any Congressional decision in the next year. The Fed's actions could massively devalue the dollar, push equity markets and asset prices to dangerously new post-recession highs and upset our neighbors, who resent us debasing our own currency and throwing capital at developing nations trying to control their own units of exchange.

It seems politicians have been the object of America's ire and concern moreso than the Fed in recent week.

It might be time to reevaluate how we cast blame.