Business

Dear John: Master of disaster

Dear John: You never fail to precede any mention of quantitative easing with the word “disastrous.” Can you tell all of us again exactly why it is disastrous? RDB

Dear RDB: QE’s goals were to stimulate the economy and create jobs. It hasn’t done either.

What it has done is transfer an enormous amount of wealth from the middle class to the already rich.

And it has put the US in an incredibly dangerous position of having a shadow currency.

The $4 trillion on the Federal Reserve’s balance sheet isn’t really money, but it could undermine the dollar and cause incredible tensions between us and our creditors.

That $4 trillion was money digitally “printed” in order for Washington to purchase government bonds and mortgage securities, a move intended to keep interest rates low.

And it has — on the short end of rates. But longer-term rates have risen anyway, making the Fed essentially powerless.

Other than that, QE has worked great.

Now they don’t know how to unwind it. And it could take a generation to do so.

Dear John: I just wanted to thank you for everything you did to help my mom out. You really saved the day, and I am forever grateful.

Without your help and the help of attorney John Lettera, it would have been a disaster.

After one more mortgage payment, my mother will be in good standing with Wells Fargo, and everything will be back to normal.

If you have a favorite charity, I would be more than willing and happy to donate my time. Let me know, and I’ll keep you posted.

Thanks again, John, and all the best to you. J.C.

Dear J.C.: Readers of this column will remember your story from last year. Wells Fargo jerked around and threatened to foreclose on your 76-year-old mother, who was in poor health, over an $8,000 mortgage dispute.

I’m glad to hear your mother will be able to continue to live in her house. Some of these banks get a little too carried away and need a wake-up call.

I was glad to kick Wells Fargo in the teeth for you. I hope this bank is one step closer to becoming a good corporate citizen. And I’m glad lawyer John Lettera, of Lettera Mosiello in Purchase, NY, worked out. I asked him to do a good deed, and he responded without hesitation.

As for the charity: the Multiple Sclerosis Society.

Stay well, and thanks for reporting back to me.

Dear John: Your article about the employment situation prompted me to write.

As a practical measure, the December job report is not a good representation of hiring. I have been a headhunter/recruiter for 35 years, working with large multinational companies.

Companies prefer not to start new hires in December, especially after Dec 15. Let’s see what January will look like before we panic. E.L.

Dear E.L.: Thanks for the note.

But things like that are supposed to be accounted for in the models used by the Labor Department. The government’s seasonal adjustments are supposed to smooth out things like the hiring that leads up to the Christmas season and the layoffs that occur afterward.

And the fact that nobody hires after Dec. 15 is also a pattern that shouldn’t affect the employment numbers for that month. The seasonal adjustments should take care of anomalies like that.

In fact, the Labor Department’s surveys are conducted in the middle of each month. So the lack of hiring after Dec. 15 shouldn’t even be an issue.

One of the points I and a few others have been making these past few years is that the government’s seasonal adjustments have been screwed up. Why? Because the so-called Great Recession of ’08 changed the seasonal patterns. And the anemic recovery also altered the growth patterns afterward.

So instead of seeing a slowdown in job growth in December and (likely) in January — followed by a speeding up in the spring — what we are probably really seeing is nothing more than statistical noise.

Is the economy doing well? No, it’s probably growing at a substandard pace.

But if we listen to all the noise, we are going to go crazy.