Posted by BE on April 29th, 2012
This question arose in my mind a day or so back: how, if at all, would being fabulously rich and still very much in one’s prime affect a Prime Minister’s approach to the job?
I was of course thinking of John Key, billed ‘the fifty million dollar man’ when he first came to the public’s attention as a potential prime minister in the early 2000s. It would be reasonable to assume that Mr Key is worth a lot more now. He could presumably have lived quite comfortably off his parliamentary salary and perks for the last ten years, and certainly for the last six as Leader of the Opposition and Prime Minister. So even if he’d been earning a measly 5% on his investments, he could theoretically have increased his wealth by 50 percent. His $50 million could now be $75 million.
Now please don’t misunderstand me. I’m not complaining about Key being rich and I don’t begrudge him the money. What I’m interested in is how such absolute long-term financial security might affect a 51-year-old former investment banker and foreign exchange trader’s approach to his future career. How might a graduate of the bourses of Singapore, London, Sydney and Wall Street feel about settling down to a long-term career as Prime Minister of New Zealand or, heaven forefend, as Leader of the Opposition?
In my experience, most first-time candidates for election to Parliament in New Zealand cherish the hope, though they invariably deny it, that they may one day sit behind the big desk. They see politics as a career. They crave not just power, but enduring power.
Helen Clark provides the perfect example. Her involvement in Labour Party politics dates back to 1971 and formally ends in 2008. That’s 37 years. Twenty-seven of those years were spent in Parliament. She was Prime Minister for 9 of those years. Her apprenticeship for the job was twice that long – 18 years. Helen was a career politician. Politics was her vocation. With the exception of a brief period as a university lecturer, she had no other job.
Is the career politician likely to be more cautious, less prone to risk-taking than someone for whom politics is not their first career choice and who, as in the case of John Key, has experienced the high-stakes, high-risk, high excitement world of a Gordon Gecko?
Certainly caution and conservatism were part of Helen Clark’s personality and her political style. In an interview for my book Helen – Portrait of a Prime Minister David Lange observed:
“She was totally meticulous in terms of not rocking the boat. Anything she said that might rock it, she said to herself for years… It’s a view of life. We live in an age where instant gratification is deemed to be a political necessity, where the next public opinion poll is critical, where the three-year electoral cycle is where you either haemorrhage or triumph. And here we’ve got a woman who is almost Chinese in her approach to time.’
Helen was not a risk-taker.
On the other hand, it has struck me in recent weeks that John Key’s approach to the job, or perhaps to his own security in the job, has bordered on the reckless. His attitude to public approval, by definition essential to political survival, appears to be indifference or possibly disdain. He seems unaffected by voter distaste for the sale of state assets, the flogging off of our land to foreign interests, his shonky deal with Sky City to trade 500 new pokie machines for a $350 million convention centre in Auckland, his government’s stated intention to frustrate the will of Parliament by vetoing Sue Moroney’s Paid Parental Leave Bill, if it succeeds….
Though losing the next election for National would be an embarrassment for Key, his wealth and other career options mean that job security is not something that needs concern him. He doesn’t need the job in the same way that the career politician does. And it is that ‘not needing’ that may lead to greater risk-taking in political management and policy making.
That is not an inherently bad thing. Caution and conservatism in a leader can lead to social and political stagnation; risk-taking, perhaps re-defined as boldness, may be necessary for desirable social and political change.
John Key is not a career politician. He’s already indicated that if National loses the next election, he will move on. And the loss will be tempered by the fact that he was without doubt the most popular Prime Minister the country has produced.
So the answer to my original question would seem to be: yes, being fabulously rich and still very much in one’s prime probably will affect a Prime Minister’s approach to the job.
A further question might be: if Key wins in 2014 will he stand again in 2017? Will he seek an unprecedented fourth term? I very much doubt it. You see, I have this sneaking suspicion that this prime minister has already had just about enough. He can tick off Multi-Million-Dollar-Man and Prime Minister of New Zealand on his bucket list and move on to fresh fields and challenges. That’s the joy of being fabulously rich, in one’s prime and not a career politician.
As i understand it , John Key takes a salary of one dollar annually with the rest of it going to a charity so he’s not in it for the money.
I think history will see him as a good man who tried his level best to use a business model to drag New Zealand kicking and screaming into the modern world.
He appears to be trying to do what most businessmen of calibre do, which is to streamline a flagging ” business” ( i.e NZ ) and put it back into positive cash flow.
In this instance, it’s unfortunately a country which has a propensity for negativity and moaning whilst still wanting all the pluses that money can buy…a nation of ” cake and eaters”….you only need to look at ‘ rent-a -rabble” marching up Queen St yesterday with all the whinging different agendas and political opportunists, to see why Key has probably decided to just ignore all naysayers and Jeremiahs and get on with it, secure in the knowledge that at the end of his tenure, win,lose or draw that to his own satisfaction he had done his best…he seems to be a decent man and if it was me i would feel personally insulted by a lot of the implied criticism for every move he makes.
His successor will be Steven Joyce and he’ll carry the chalice forward with great gusto, ignoring all the fools and horses with a distinct possibility that he may give a tilt to Marie Antoinette when he encounters the usual gaggle of ” cake’n’eaters”…we’re very lucky to have Key and his band of merry men at this time when money is meeting it’s Armageddon in it’s current form..amen
BE: I take it from all of this you don’t believe there are any inequities, inequalities or injustices in the country at present that are worth protesting about.
Very interesting commentary. There does seem to be a sense of freedom about him, possibly because he is financially independent.
The problem with the “streamlining a flagging business” hypothesis is that with a country you’re stuck with your employees – you can’t sack them for not performing. You could possibly try to make their conditions so miserable in the hope they’ll go elsewhere and look for work, I suppose.
With apologies to Rob Pharazyn for answering a question addressed to him: Sure there are inequities, inequalities and injustices worth protesting about but the ‘just say no to everything’ protest he was talking about wasn’t about inequities, inequalities or injustices. What were they protesting about ?
1) No to asset sales [personally I’m about as passionate about the current asset sales one way or another as I was about selling Contact Energy in 1998 – i.e. not very passionate].
2) No to the Crafar farms deal [A deal that’s persistently misrepresented – these farms are already owned by foreign interests in the form of Westpac bank].
3) No to Sky City building a convention centre [i.e. no to increasing our GDP per capita].
4) No to fracking, mining, and exploration [i.e. an even bigger no to increasing our GDP per capita]
5) No to Len Brown [this one is a real puzzle, maybe they want John Banks back?]
BE: So -you don’t care much about 1; your point on 2 is correct; you’ve left out half of the deal in 3 – changing the law; more pokies and the social harm they will do; In 4 you’ve left out the very real dangers of fracking and any reference to where the mining and exploration they are protesting about, is to take place; and you don’t understand what they’ve got against Len Brown – that he has proved to be a fence-sitter and failed to support the wharfies inter alia. I haven’t seen any suggestion of wanting John Banks back.
Thanks, Bill…you got my point.
Brian…i was just staying on message regarding your blog post and John Key…discussion on social injustice etc were not what i was pointing at and would seem to be another topic entirely which i would be happy to comment on if you wish..?
The guts of it is that from a wee boy growing up in a state house with not enough money he said to himself “I want to be Prime Minister”. Now who was PM at the time as his example for this assertion? Could have been Big Norm, Muldoon or Holyoake I think. Wonder which one, or was it just that the position would give him power and money.
It certainly wasn’t from a social justice point of view. He has given nothing to society, he has not done any hard yards within any community organisations etc.
The only thing I have heard about his pedigree is that he can make lots of money.
So to end the fairy tale…..the litle boy went out in the big wide world to make lots of money so he could buy the job of PM cos that’s the only way he knew to get it.
BE: I’m not a huge Key fan, Odette, but I think it’s a bit unfair to suggest that he ‘bought the job’. You can’t get the job without being elected.
Brian thanks for responding and welcome back [I was worried you were not going to be making these kind of blog posts any more]. My itemised points were all brief and once over lightly admittedly. Partly that reflects the practicality of a comment to a blog post. But mainly I was trying to indicate that I didn’t really think the protests were about inequities, inequalities and injustices.
BE: Fair enough, Bill. Similarly, I think the discussion has got somewhat off my point in the post. This wasn’t an attack on Key. I’m genuinely interested in whether a PM who didn’t set out to be in politics and doesn’t actually need the job may be more risk-taking than a career politician who has devoted their whole adult life to getting into parliament with the intention of succeeding and staying there. I think the comparison between Clark and Key answers the question at least in part. Clark could well have been bolder; Key is showing signs of recklessness.
If Key can see himself as influencing the economic direction of New Zealand more, say, than Patrick Gower or John Campbell he will put his back into the machinations of campaigning for 2014.
However he made an insightful point via a US diplomatic cable in 2007that New Zealanders had a ‘socialist streak”. This may be the insurmountable hurdle that causes him to believe he has given the position of PM his best shot.
I’m with Rob Pharazyn’s points for the most part. The media is dissecting Key for not caaaring enough to address said injustices and inequities and this is driven by the rent-a-mob in thrall to the seductive whispers of socialism. That’s all the tall poppy syndrome is. The ripping down of others because they have more.
For a small population New Zealand ranks one of the highest in social injustices such as child poverty, teen death rate and domestic violence.
Yet we are at the mercy of the minority who can price fix on milk, cheese, meat etc.
We have been at the mercy at bloody farmers for decades, and the hyprocrytes bleat and moan about the chinesse buying the Crafer farms.
Then, this is the real laugh, Fay gets in with his court injunction to stop the sale. He does not even live in New Zealand.
Hell, the farmers and Fay put up with selling of our assets overseas. I remember Fay making a fortune out of it thank you very much.
The joke is, these farmers, and moaners etc, vote National. Hell they would vote National even if a monkey stood for parliment.
Thats the reality, these people are a shelfish lot who will support Key because
One hes not Gay. Lets be honest here, a true blue kiwi male will not, and never vote a queer politician.
Two hes rich
Three, he appeals to the stupid. As Ruch Richardson one said about the voter “…they are little more capible of a stampeed”
New Zealanders are prepared to accept children getting third world diseases, suffer under the most apaulling conditions, and we are not even mentioning Christchurch, so that they can live in the comfort of their homes and be reassured that the gay loving leftist party of the left are not in power.
All I can say is wake up New Zealand, tinkerbell does not exist.
Keys not the nice man, the smiling person that you would want your daughter to marry, the illusion that you can have a beer with him, a good keen Kiwi man. Hes wanting somthing else, the feather his nest, and the nest for his rich mates.
Meanwhile the farmers will be supporting employment law so that they can treat their employees a little better than they treat their animals, and be given the right to print their own money in the name of Fontera.
GOD SAvE THE QUEEN
Ok OK to all your right wingers getting upset at me telling the truth, yes there are spelling mistakes in my comment. They are typos and I don’t care
More to Odette’s point: Of course Key did not buy his position straight out. However, his class (the financial elites) are the ones who wrecked the global economy so that the asset grabs could begin in earnest, and in many Western democracies we can see quite easily how the bankers and technocrats have been replacing the familiar career politicians (a la Clark). Surely, Brian, you can’t be suggesting that National’s well-heeled backers and orchestrated control of its message via a sycophantic press didn’t have something to do with the 2008 and 2011 victories? And now, Key’s calculated and rather sneering disregard of the well-known huge majority of Kiwis who categorically do not want asset sales all the while pointing to the flimsiest of mandates (National got fewer votes in 2011 than they did in 2008) signals who he really works for: the financial class. He is not, and never really was, a politician except as a means to an end. And that end, unless we assert ourselves, is the destruction of New Zealand’s sovereignty and establishment of multigenerational — possibly permanent — debt servitude.
Well said Phil, so there BE!
BE: I’m not sure how you buy an election in New Zealand. You win an election when more people vote for your party of coalition than for your opponent’s party or coalition. We don’t have the American system where the party with the most money can massively outbuy its opposition in advertising and television time. I’m a Labour supporter of course, but I can’t deny the fact that National and John Key dominated the polls for the last four years or that Key has been the most popular prime minister we’ve ever seen or Phil Goff one of the least popular party leaders. The election reflected the will of the people in a democracy. National’s victory was not bought any more than the Greens’ excellent result was bought. Parties can offer lollies in elections of course, but it’s up to the voters to decide whether to accept those lollies. This talk of buying an election is absolute nonsense.
Brian, you’re quite right, I was getting sidetracked. Responding to the cut and thrust without really thinking about the actual point of your post. I see others are making the same mistake as me and just going through the usual left v right dance. Your point is an intriguing one, different and insightful. I for one will be mulling it over in the days ahead.
I agree with your analysis. Having options always makes a difference. As any trader knows, the ability to walk away from a deal is essential to successful negotiation. Key will always have Plan B. And yes, that makes him more reckless (your word) or ambitious (my preference).
We saw clearly that from the beginning when he took National into coalition with the Maori party.
I think he will always seek out the biggest challenges. In the first term these were thrust on him in the form of the GFC and the Chch earthquake so he had to be reactive. But in this term I think he is looking for strategic goals. I suspect he has two big ones. The first is to take the NZ economy forward. The second is to move NZ’s politics beyond socialism and racism.
So long as he sees open doors on those adventures he will stay in the game. When they close he will be gone to Plan B.
I’ve wondered similar things since reading this:
“How Wealth Reduces Compassion
As riches grow, empathy for others seems to decline” http://www.scientificamerican.com/article.cfm?id=how-wealth-reduces-compassion
What effect does John Key’s wealth have on his ability to be compassionate and understand issues of social justice? Arguments about right/ left aside his governments record has not been great on such matters.
So its ‘career politician’ versus someone who doesn’t have a historical interest in politics but who has lots of money to buy their way into the frame!
When was the last time you visited the local pet food butcher for an intricate human medical operation Brian?
Oh look, kindy kids interviewing populist politicians on TV3!! WOW! it all fits, doesn’t it?
It all makes so much dollars and cents!
Look out here come the ‘nit-pickers’!! must be the lefties eh?
BE: I’m not sure how to reply to this incomprehensible rubbish. What I wrote was a non-partisan post, attempting to explore a reasonably interesting premise that having almost limitless career options may affect a political leader’s approach to issues and to voter response. Do you have to be so angry and bitter about everything?
Kat, why is it that your “lefties” always play the man and not the ball?
As Brian reiterated, the topic was whether financial security makes Key bolder but the Left cannot see past their fantasy of him as an evil capitalist out to shaft the poor.
I love it when righteous posters accuse ‘lefties’ of ad hominem arguments as if they had taken out a franchise on it – and conveniently forget the venom poured out by some during the Clark years.
And I’d like to address too the specious argument that anyone who doesn’t like Key is jealous of his wealth. I don’t give the proverbial rat’s nether regions about his wealth – I just hate his deal-making politics.
Nell, I didn’t just accuse “lefties” of resorting to ad hominem arguments, I observed them all do so here rather than address Brian’s point.
That there are some unpleasant right wing nutters is no excuse. As for deal-making politics, what on earth do you think coalition politics is about?
Alan, I wasn’t referring solely to you, but to an interesting phenomenon I’d noticed on this and other sites. As you say, nutters come in many colours.
There are deals and deals! I suspect that for Key (and Joyce, come to that) the deal is the thing, and they seem genuinely perplexed that what to them is an ‘elegant solution’ is to others morally reprehensible. Whereas in some areas of business the end seems to justify the means, in national politics that can’t always be so. If anything impels Key to depart of his own volition rather than being voted out, this could be it.
I don’t know how you arrived at the conclusion that John Key is our most popular politician ever, Brian. Even within my lifetime (quite a long time actually now I come to think about it) we have seen more popular politicians but the point is that it never lasts. Rob Muldoon who was a hero to many is now widely regarded as a nasty little political guttersnipe who actually made a total dog’s arse of our economy notwithstanding that many people at the time thought he knew what he was doing. Norman Kirk was almost worshipped as a saint but had some extremely unpleasant authoritarian social attitudes. And of course David Lange who was also widely admired is now seen to have been a shallow and self serving egotist. He was, in fact, our silliest prime minister since George Forbes and had no idea what his cronies were up to until towards the end, at which point he started hitting the bottle to an alarming extent. These people come and go and I don’t expect John Key to be any different. History will regard him, in my estimation (I’m now taking bets on it) as an unimaginative man who believes all that junk economics about the market that he’s been brought up on and who doesn’t really understand his own country and how it works. He’s spent most of his adult life out of it after all, particularly when some quite important things were happening in the eighties and nineties which have defined our politics since. When it turns to custard he’ll move on, and then the cycle will start again. I don’t understand why we are always looking for A Saviour
BE: Hi Tony. Your argument seems to be that Key, along with the other ‘popular’ politicians you name, doesn’t deserve to be popular or that ‘popularity’ is a shallow thing with no bearing on ability or substance. I made no comment about the merit or value of popularity, merely stated the fact – and it is a fact – that no politician in our history has been more popular than Key. This is borne out by his consistently high ratings as ‘Preferred Prime Minister’, virtually since he became Leader of the Opposition. To some extent your examples bear out my argument. Muldoon was liked and loathed in more or less equal measure. Kirk was adored by the Left but hated and feared by the Right. Lange amused but was regarded as a buffoon by many. Key seems to cross these boundaries. People feel affectionate towards him. They think he’s ‘nice’. He enjoys ‘popularity’ in way I don’t think we’ve seen before.
One point I will concede. Popularity is largely a product of the television age which has made a quasi-personal relationship possible between the politician and his/her audience. The term may be inappropriate for pre-television politicians, though one cannot totally dismiss the role of radio. Scrim provides evidence of that.
Of course he bought the job. It’s because he represents nothing that he is so popular. It’s an important tenant of marketing to make sure your product has no strong charisteristic such as taste or flavour. Some people will not like it. John Key understands this and has diligently kept his team in the background to ensure no-one says a word out of line, or puts forward a policy idea that might be controversial. The team are understandably in fear of their jobs, should their leader become bored with the whole thing and find something else to do.
As someone who has chosen to live in NZ rather than been brought up here I suspect that we are happy to live in a country that is not go ahead and has a government completely lacking in ideas because that’s the way we like it. However my children who are currently in the process of emigrating from UK will be heading for Australia.
BE: I can find no connection between your assertion in your first sentence (‘Of course he bought the job.”) and anything that follows it in your comment.
Tony, I’ll take your bet. First, I’m sure Key understands far more economics than you do. Second, I think he understands NZ pretty well too. However, understanding something is different from being content with it. I do think Key wants to make big changes. The test will be whether he can carry the electorate with him. So history will judge him on that success or failure, but he will not be viewed as lacking imagination.
As Brian rightly observed, he is a bold risk-taker – quite the reverse of your opinion.
Hmmm, just find myself innocently pondering whether, when there’s that much dosh in his piggybank, he personally benefits best from a higher or a lower exchange rate for our $Kiwi$. I fully understand he’s in no position to influence such matters. It’s not really his bailliwick.
On an entirely unrelated matter, has anyone yet been able to explain his permanent smirking smile?
If anything, the biggest “cake-eaters” are the TABOR-ites who want first-class services but don’t want to pay the taxes to upkeep them. And it’s worth noting their idol, Douglas Bruce, has been put in the slammer for tax fraud.
Wealth isn’t the issue per se. There are obvious differences between the self-made (eg Sam Morgan, Rod Drury, Richard Branson et al) and the nouveau riche (Key, Tony Marryatt et al). And among those differences is foresight.
@Kyle Mac: in some cases, a certain amount of wealth can also foster altruism and prevent people, particularly the middle classes, from treading water. Post-WW2 Germany is a case in point. So there must be some kind of acid test to distinguish the two.
John Key’s popularity is still very strong, regardless of his unpopular pokies for convention centre and asset sales. He is being afforded much leeway because of those dark nine years that preceded the Nats coming to power.
And unlike his predecessor (a cloistered academic) Key actually got a real job and earned his own way in the real world, not by way of the uninterrupted taxpayer-padded sinecure.
BE: Whoa there, Candy. Forex trader ‘a real job’? More importantly, do you really think that being Prime Minister and running the country, whoever does it, is a ‘sinecure’?
I’m not sure whether or not being rich makes you think differently. But I’m sure that not having to worry about losing your job does.
As someone who has never been particularly concerned with ‘security of employment’ (I’ve been fired once, made redundant four times, and simply walked out with nowhere to go on two other occasions), it took me a little while to realise that most of those around me were scared stiff at the prospect of losing their jobs.
For many of these people, this fear hampered any inclination to do the right thing. Better to keep your head down. Better to stick to the rules – even when you think the rules are nonsensical. Better to put whatever energy you have into short-term survival. I don’t think that Mr Key does any of these things.
In time, the voters of New Zealand will get the chance to have their say on whether they thing Mr Key has done the right thing – for them. Some will say yes. Some will say no. But I’m pretty sure that Mr Key will think that he’s done his best with what he has had to work with. I’m pretty sure that he doesn’t lie in bed at night thinking: What do I have to do to avoid getting fired.
Al, a currency trader benefits from movements in an exchange rate, not whether it remains high or low. However since he has presumably parked his assets into a blind trust distributed between local and overseas investments I doubt the exchange rate makes any significant difference and the overall progress of the relevant economies is more important.
Which, along with the polls, probably explains his smile and your misery.
I find Key’s atitude to be somewhat laissez faire .Its not what I like in a PM.Being that wealthy surely allows him latitude to take risks that may impact greatly on the lesser wealthy.At least Bill English(I dont like his policies)shows an emotional engagement lacking in Key
My impression is that poorer people are very concerned about the cost of bread or petrol etc. The very few very rich people who I know, seem to be totally unconcerned at such trivia. My guess is that an MP, or more especially a Minister would be more likely to be disconnected by that trivia. Living in luxury with the huge range of choices about what and where, and as Jack says no employment anxiety, must make it a high risk of rich PMs being unconcerned about the poorer folk.
When travelling through poorer countries I try to see how we “rich” tourists might be viewed by those with so little. Part of me says poor buggers, but then I hear echoes from NZ rich folk saying “Get a job you bludgers! I made it so you can too.”
A very rich PM? Only his pride will suffer when his mana crashes. (From his own words Mr Key never had to struggle. He was provided well by the State and his Mum.)
Well Brian I am not angry and bitter about everything. And I agree with most of what you wrote. I guess my ‘rubbish’ above was in response to your notion that John Key the multi millionaire’s success as PM is by some wonderful fairy tale connection with the electorate. I would call it more of a con.
Key, the front man, is a clever strategy to put a smiling man with a so called ‘aspiring’ history of financial success in a position to softly, softly crush the left and safeguard against the redistribution of wealth. Only someone with Keys credentials and just ticking their ‘bucket list’ could do the job. The irony is that the ‘voter response’ you mention is the electorate subjugating itself.
I am quite ‘happy’ though about David Shearer being the leader of the Labour Party.
BE: Fair enough, Kat. We can agree to differ.
Candy: ‘And unlike his predecessor (a cloistered academic) Key actually got a real job and earned his own way in the real world, not by way of the uninterrupted taxpayer-padded sinecure.’
I’d suggest that university lecturers rub shoulders with a wider cross section of the population than merchant bankers and currency speculators, as they do their ‘real jobs’ that are subject to tight budgets and performance and research requirements. In addition, they perform a useful public service by helping to educate people. Anti-intellectual cliches are indicative of lazy thinking.
…Brian, this is a very salient piece at this time, it’s relevancy grows stronger everyday – is the PM adopting an increasingly reckless attitude in the position he is taking in issues of real public interest…
Allan, why is it you “righties” always think everything is some kind of ball game?
The problem is Key has a carefully constructed back story, one that was regurgitated to us largely unchallenged. There is no doubt he has a substantial bank balance but given the industry he was in, surely a healthy bank balance would be a given?
Okay so he made it to CEO of Merrill Lynch, but at the time Merrill Lynch were known for having exorbitant salary packages because they struggled to attract candidates, let alone keep them. Is this how he made his wealth? Just how well did Merrill Lynch perform under his watch? We’re told they performed well enough but without context that call is without merit.
His term on the Foreign Exchange Committee of Wall Street lobby group the New York Federal Reserve. The media lauded Key’s invitation to join the committee as as prestigious thing but the NYFR is nothing but a glorified lobby group and his appointment is no more auspicious than Jenny Shipley’s been appointed to CERA. Just what regulations did his FX Committee support? Laws passed or changed during this time have been attributed to causing the global financial collapse. Did his committee argue for or against regulating credit default swaps and derivatives, or what Warren Buffett called “weapons of mass destruction”?
His love affair with Ireland; his midas touch worked a treat there didn’t it?
He went to Singapore in the mid 1990s when he left the place the Asian financial markets were on the verge of collapse. How well did his company/his investments fair?
And what of his time in New Zealand? He worked for a subsidiary of Bankers Trust New York, his Auckland branch mostly trading in the kiwi dollar in the offshore market. It was the most volatile and therefore the one in which a trader could make the most money. Most of the movement in the kiwi occurred in New York. Funnily enough it was a New York based Bankers Trust currency trader Andrew Kreiger that made the infamous raid on the New Zealand dollar in late ’87.
Even his non-politico, state house boy made good story requires context.
Our media are so bereft of intellectual curiosity it hurts.
Interesting blog post! It transported me back to the time when John Key came from practically nowhere to run for PM. Up until that time I often bemoaned the concept of career politicians; I strongly felt that a modicum of working experience in the ‘real world’ (i.e. outside of politics) would have benefitted Helen Clark. However, faced with the prospect of a former exchange trader at the helm of our country, I was quick to admit that John Key’s ‘real world’ experience was most definitely not what I had wished for.
And yes, an appetite for risk is a differentiator between a career politician and the independently wealthy politician, but what I find more important are the underlying values that guide them.
In the case of John Key I was immensely disturbed by the characteristics that dominate his breeding ground; complete recklessness, rampant greed and a total disregard for ‘collateral damage’, are well documented within the global financial industry making it the moral wasteland within which extraordinary talent like John Key prospers.
And while the big corporates increasingly operate within similar values and behaviours, I wouldn’t tar all fabulously rich political aspirants with the same brush. I would still welcome a political leader with ‘real world’ experience but think we should demand demonstrated moral fibre, and have the foresight to question certain backgrounds.
I do not accept that being youngish and wealthy will result in a more reckless approach to the way the job of PM is done. Reasons are as follows:
1. Any MP in the job long enough to be PM knows the vagaries of politics and must have reconciled themselves to the fact that any issue they lose control could result in their demise in short order. In other words they understand progress requires risk taking.
2. The proposition only works if one assumes that to a less wealthy PM the job is more important than achieving things. I am not that cynical.
3. The proposition assumes that ex-PMs are not likely to have meaningful roles afterwards when all the evidence suggests that either in commerce or diplomacy, ex PMs are well able to find something meaningful to do.
What is true though is that hard driven successful people tend to be very outcome focussed. As such if they can’t make progress they move onto other things. Therefore it’s not that wealthy people make reckless PMs but that people who have the drive to become wealthy may as politicians be motivated to achieve or move on.
BE: The issue is less the money itself than the long-term financial security and the wider career options which it offers.
Kat, I can’t answer that question since I can’t see any contextual relevance.
Nell, I’ve been on both sides of the fence. What is missing from the university environment is both the financial discipline and opportunity. In business both the rewards and punishments are greater and more immediate. Also there is much more flexibility and a much wider range of skills necessary which requires a team with very varied personalities. You have to deal with much more uncertainty and more varied threats and challenges. So, yes, students come from a wide range of people. But the context is quite tightly framed and controlled.
A glimpse into the moral fibre of our PM from an old Sunday Star Times profile (Feb 2008) – the last para is especially telling.
Quoted from SST:
“20 years ago, he worked closely with a famed currency trader who mounted a brutal speculative attack on the Kiwi dollar. The attack, which has entered forex (foreign exchange) trading legend for its scale, audacity and profitability, prompted Reserve Bank alarm that the currency would collapse.”
“Krieger was the man who a few months earlier had entered forex legend with a massive speculative raid on the kiwi. As Krieger later explained in his book The Money Bazaar, he believed the kiwi was overvalued, and began betting on a fall, selling the New Zealand dollar heavily. Once the currency had found what he believed to be a floor, he bought again at a much lower price, making a profit on the transaction.
This is standard stuff, but Krieger staked so much on the bet, it was said to be more than the entire money supply of New Zealand. And the size of his sell orders, hundreds of millions of dollars at a time, allied with the relative scarcity of New Zealand currency in circulation, meant he was able to push the kiwi down.
The “play” sent the kiwi plunging 5% in a single day. Krieger claims he helped trigger a fall in the New Zealand dollar against the US currency from 66c to 59c, before getting out with his profits. In a 2004 article The Economist listed Krieger’s speculative attack as one of the best financial trades in history.”
“So what does Key think of the swaggering trader seen by the Reserve Bank as a threat to the national interest? Asked if he admired Krieger at the time, Key says, “yes, I think at the time, yes, he was a very intelligent guy.
“He was a pioneer, in the sense he was one of the few people in the world who understood the options market before it was really established. He blazed a trail and that gave him a strategic advantage early on.”
Key says he does not believe a moral issue arises for the traders who make these speculative attacks on currencies, or for the dealing rooms that carry out their orders. “I don’t really see it as a judgemental business. You’re simply executing orders for people.”
BE: Interesting. Very interesting.
@Politically Corrected: indeed. Key’s “state house background” is probably the biggest astroturf job ever pulled off in NZ, taking after its much bigger English-speaking cousins.
I love that picture of John Key. He looks just like the splitting image of F.Scott Fitzgerald’s Jay Gatsby: happy, smiling, effusive, radiating a beguiling charm to endear all and sundry; whatever your political persuasion happens to be. A marvellous incarnation of genuine warmth and humanity, appears not to have a care in the world (and maybe he doesn’t).
Compare the above picture to our former PM — who appeared stoic, dour, rigid, cold; not too unlike a People’s Commissar from the 1950s’ Soviet Union.
Of the two, who would you look to for inspiration and the giver of hope?
Alan, you have it with your comment regarding relevance. Why ask silly leftie-rightie questions that are meaningless in the big picture? Back into context though, with the conman Key at the helm mutiny is on the horizon. The crew will only put up with so much scurvy before the plank comes out. Splash, and goodbye Key and co. Now, are you truly a plank walker?
Sylvie, a speculative attack on a currency is actually a bet that your understanding of its value is better than everyone else’s – or better than a Government is falsely trying to pretend.
What wins is the truth – which is morality. Governments have no morality and can never be trusted since they will change at the whim of their electorate or leaders.
Kat: “Why ask silly leftie-rightie questions that are meaningless in the big picture?”
It wasn’t silly. Up to that point all the leftie comments had just been ad hominem attacks on Key ignoring Brian’s central issue. I was trying to get them to say something useful and relevant.
Unfortunately the crew seems to be busy tying the leader of your mutiny to the mast at the moment. So no wonder the captain is still smiling at your displeasure.
Alan, to be sure, certain members of the scurvy ridden crew are suffering from the Key induced malaise and are acting out of sorts, but they can’t tie one decent knot between them. The captain carries on regardless, but his smiley mask has slipped enough to afford me some pleasure.
Sylvie. There is strong evidence that Mr Key was actively working for Krieger during that raid, and participated in the near collapse of NZ economy. Mr Key is evasive about his participation but anyway your quote suggests a disconnect by him.
““I don’t really see it as a judgemental business. You’re simply executing orders for people.”
A sort of teen, “Whatever.”
@Alan Wilkinson. A speculative attack on a currency has less to do with the perceived value of the currency and more with the funds at the attacker’s disposal which (thanks to the miracle of leverage) can be rather enormous. So with the necessary financial backing, it’s thus possible to “short” a currency, and invariably cause its value to decline regardless of its intrinsic worth, and with sometimes disastrous consequences for the nation involved.
All in all it’s little more than a game of poker, but for serious gamblers.
The winner is indeed the truth – the truth being that he with the biggest pot of money calls the shots.
@Ianmac – Yes, the article implied as much. And I agree about the last sentence suggesting a sense of disconnect. But the quote strikes me as much more than a sort of verbal shrug – it shows JK to be exceptionally good at executing orders … even orders that he knew would severely damage his country’s economy, while lining his own pockets and those of his cronies.
I find it interesting that our leader is good at taking orders and executing them … without judgment and without the burden of a pesky conscience …
@ Sylvie. Great post! Reminds me of George Soros and his speculative betting on the British pound, of which he made over a billion of them.
Sylvie, it is possible to short a currency briefly by sheer volume but it is high risk and is more likely to end in expensive failure because it relies on other people chasing the price down and keeping it down after you stop selling – otherwise you make a loss. Both Soros and Krieger made money only because they were right.
And bankers trade foreign exchange for their customers to make a market which is essential for international trade just as stockbrokers trade shares for the clients and banks send money overseas when you need to. To complain that Key did his job by carrying out trades for Krieger is as silly as complaining a stockbroker sold shares or a real estate agent sold property when asked by a client.
Alan, what you describe sounds rather quaint and suggests that bankers and traders are part a (noble) institution that exists (primarily?) to facilitate international trade, share investments and the like. Truth of the matter is that those types of transactions are dwarfed by the purely speculative stuff that would make anybody’s eyes water.
With daily forex trading amounting to nearly US$4 trillion, the entire annual global GDP’s worth is traded in less than 3 weeks. This leaves little to the imagination what the trading of the remaining 49 weeks’ worth of dosh is all about.
In context of an industry that has a disturbingly cosy relationship with its so-called regulators, and displays criminal creativity in inventing mind boggling derivative instruments which are designed to obfuscate the unpalatable truth, I fail to see what value a proponent of such an industry brings to the NZ government and its people.
Sylvie, currency speculation and options trading increase market efficiency and reduce volatility for international traders just as they do for share markets. The only problem arises when Governments bet taxpayers’ money against the professionals – and usually lose it.
You fail to recognise the skill and judgment a professional trader must have.
AW asks “why is it that your “lefties” always play the man and not the ball?” For a view of others who “play the man and not the ball” he could go to http://www.whaleoil.co.nz/.
As i understand it , John Key takes a salary of one dollar annually with the rest of it going to a charity so he’s not in it for the money.
This is repeated frequently on blogs by Key supporters but has never been verified. I suspect it’s a deliberately seeded untruth. However I’m happy to put that hypothesis aside if someone can provide some evidence.
If Key takes a $1 salary, then Helen Clark is a trannie originally named Horace Edward Clark. And the Jews staged 9/11, fluoridation of the water supply is a Marxist conspiracy to mind-control us, jihadis will come in aircraft carriers to convert us to Wahhabism at gunpoint, and Anders Breivik is a Norwegian blackops agent sent in to discredit the defenders of Western civilisation.
Seriously though, Rod Oram calls bulls**t on the John Frum economics that Key rain-dances to.
BE: You’ll be sorry if any of those things turn out to be true!
BE: Thanks for that.
There is possibly an excellent explanation for why John Key is a multi-millionaire PM but Rod Oram is a journalist.
It might be interesting if someone applied the Hare Checklist test to John Key. It starts ‘Has a glib & superficial charm….’
Why is a multi-millionaire worthy of more respect than a journalist, plumber, barista or indeed your very self?
What is the point that you are trying to make?
peter, respect is your word, not mine. I thought my point was crystal clear but evidently not to some.
John Key has proved himself and succeeded in the tough and real world of finance and also politics. Rod Oram has proved himself and succeeded in the fantasy world of opinionated word-craft.
I know whose judgment on economics and politics I would recommend. The point of course is not that Key is rich, but that he proved his ability in his field to achieve that from nothing.
“I know whose judgment on economics and politics I would recommend. The point of course is not that Key is rich, but that he proved his ability in his field to achieve that from nothing.”
Getting rich is one thing, using it as an excuse to shift the goalposts is quite another. That, and inferiority complexity, are just a couple of major factors differentiating the self-made from the nouveau riche.
DeepRed, doubtless you intended to say something relevant and intelligible, but you failed.
“John Key has proved himself and succeeded in the tough and real world of finance and also politics. Rod Oram has proved himself and succeeded in the fantasy world of opinionated word-craft.”
Crikey, thats an assertion and a half Alan! Not wanting to be the usual ‘nit picking’ leftie but surely ‘tough and real’ and ‘fantasy and opinionated’ are open to interpretation?
And ‘word craft’ is that the new code for media commentators?
Would you not suspect that what John Key says is his opinion?
@Alan. “John Key has proved himself and succeeded in the tough and real world of finance and also politics. Rod Oram has proved himself and succeeded in the fantasy world of opinionated word-craft.”
That is like showing respect for that chap who was imprisoned today for fraud of over $100,000,000. He must have been successful because he proved himself in the real world of Fraud.
John Key says he would want to be a butcher if he weren’t the Prime Minister. I say he should get his wish and the sooner the better.
Ianmac, I don’t think so. Your fraudster was not even good at fraud since he is now in jail.
Kat, I’m afraid for me Oram is just a serial pontificator but here’s the subtle difference for you. If Key made a mistake in his job his company lost money and he got fired. If Oram makes a mistake he writes another column.
Paul Buchanan over at Kiwipolitico has written in a similar vein Showing The Money versus Making Numbers Work.
“You have to feel for Mr. Key. Once he was in the stratosphere, unaccountable to anyone but his corporate masters and the private interests that they served. He made money off of money without having to add value or increase production anywhere, and he got rich doing so in part because he made his name in an authoritarian country in which numbers, not people, matter most. Now he has to smile and wave to a bunch of provincial hicks self-absorbed in some weird Antipodean PC navel-gazing where everyone has a say and little gets done.”
The post is chock full of his usual incisive (99/100 devestaingly accurate) bludgeoning conclusions.