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The Letter – Wednesday, 29 November 2006

The Letter – Wednesday, 29 November 2006

The Letter Limited -

The Haps

Talks to avert another Fiji coup. New National Party leader. Right stadium - wrong plan. Are Iraq and Afghanistan heading for civil war? Nicky Hager’s book is a fraud. Out of the Red is a better book.

To coup or not to coup

The Fiji Commander Frank Bainimarama gets a bad press but what a lot of what he says is true. The men behind the George Speight attempted coup have never been brought to justice. The coup plotters tried to kill Bainimarama. The Commander is also correct that the government of PM Qarase is in open defiance of the Constitution that requires power sharing. It is also true that the Fiji coups have been financial disasters. They will not be easy talks.

Not a foot wrong

Key has clearly got a plan. Don Brash when he became leader led a messy coup he had no plan and forgot he needed a deputy. Nick Smith got the position by default, couldn’t cope and had to take several weeks leave. Gerry Brownlee was then appointed without owing Brash anything. What is coming out now is that Brash never commanded his caucus and often couldn’t prevail. Leaders should never lose caucus votes.


What destroyed Sir Robert Muldoon’s economic reputation was his hasty decision to build the Clyde Dam by-passing the planning laws. Social Credit, who provided the votes in parliament, lost their seats, never to be re-elected.

First NZ, now the world

Key is right to first win the free media. Parliament is not meeting and he has the chance to set the agenda and to describe himself. “Aspirational leadership” is a stroke of real genius. It reminds us of David Lange’s claim that he would be a consensus leader. Key’s claim he wants to represent all New Zealanders contrasts with Helen Clark’s appealing to sector groups, Maori, trade unionists, Pacific Islanders, etc, never the whole country.

Positive, Practical Policies

John Key’s real test is when he sets out his policy alternatives. If he starts a biding war in health, education and welfare he will find it is not possible to out spend Labour.

Quit now

The brutal fact is the last thing a new leader needs is the old one. We like Don and agree with many of the things he said. Our advice to Brash is resign and keep your record as the man who led National back.

Big Loser

Murray McCully, the only MP Brash told he was resigning, seems to be the biggest loser. The caucus wanted English as Deputy because he is known to be hostile to McCully’s influence. Murray should think whether its time to move on.

It is a forgery

We think Hager’s book has died with Brash’s career. Much of his case is built around emails that neither Brash nor Key received. It appears that Hager’s informants have doctored the emails. Dr Michael Bassett says his emails have been altered and selectively edited to make the absurd claim that he mastermind Brash’s coup! Hager’s last book “Seeds of Distrust” which claimed that senior ministers and civil servants had conspired to contaminate NZ’s corn with GE modified seeds, turned out to be total nonsense.


The book’s appeal, such as it is, is the same as a gossip magazine, reading other people’s mail. The book proves the exact opposite of what Hager claims. National clearly did not write the Exclusive Brethren pamphlets and seem, unlike Labour, to have been very careful about the electoral spending rules.

Right stadium - wrong plan

Auckland does not need a permanent 60,000 seat stadium. The answer is to go back to the original plan which was to build some temporary seating for less than $50 million. It was the government and the NZRFU who mounted the bid for the Cup and they should pay. Trevor Mallard’s latest idea to put government appointees on to the Eden Park Trust Board just makes the taxpayer liable for ongoing costs.


The Labour government’s reputation for competence has taken a significant hit. Mallard’s open ambition to succeed Cullen as finance minister may have taken a fatal knock. (Cullen clearly thinks so). Mayor Hubbard’s inability to get his council to make a clear decision and his claim that Auckland does not need a port raises real questions over his chances of re election. ARC chairman, Mike Lee, has emerged as the real voice of Auckland. Rodney Hide and Keith Locke who, unlike National, gave parliamentary leadership, have also emerged with enhanced reputations.

Can stop dancing now

With Key is taking National back to the center there is now the need for an ACT party to make the case less government, low taxes and one law for all. Time to put away the dancing shoes, there is real work to be done.

Civil War

Dr Gary Shilling, the well known American economist with a reputation for accurately predicting trends says; “I am convinced that the [US] housing bubble is gigantic and will burst before long with massive implications here and abroad. In fact it is the key to the global economic outlook.” “[US] House prices in recent years have leapt well beyond their normal relationship to the CPI. Even when the increasing size of houses – the McMansion effect – is excluded, inflation-adjusted house prices have jumped as never before.” Shilling predicts that US house prices will fall 25% next year! He says they would need to fall 35% to reach the historic average.

Could not happen here?

Iraq and Afghanistan appear to be slipping into civil war. New Zealanders returning from Afghanistan say the government is hopelessly corrupt and the peace keeping troops, who have taken over from the Americans, are unwilling to patrol. The Taliban is making rapid progress. NZ, which has a significant army presence, will soon be faced with a tough decision, stay in a worsening situation or leave. It appears that the Americans are going to make an increased contribution in Iraq to try to destroy the private armies but it looks a lost cause. The only logic for invading Iraq was to stop weapons of mass destruction. There are no WMDs and being there is promoting terrorism. There is no strategic reason to be in Iraq or Afghanistan, so the advice of Chris Preble of the Cato Institute is to leave saying to Iraq, if you develop WMDs we will be back.

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