Heather Roy's Diary
Heather Roy's Diary
Ordinary Seaman Roy
Parliamentary recess this week gave me the opportunity to "visit the Navy". I spent the week in a pair of grey Navy coveralls aboard Te Mana, one of two Royal New Zealand Navy ANZAC frigates. Te Mana has been in dry dock for annual maintenance, so before she is deployed a period of testing the propulsion and warfare systems and training the ship's company occurs, and I have been observing part of that process. My few days aboard started with PT (Physical Training) each morning at 0615 and usually ended with a watch on the bridge. I have seen everything from testing sonar equipment and the ships weapon systems to man overboard and fire drills, and assisting in the galley. If called upon I could now make chicken lasagne for 180! Like joining the Army, seeing what the Navy experiences on a daily basis gives me a much better feel for my National Security responsibilities for ACT.
Don Brash is a very likable person and he has achieved much for the National Party, although there appears to have been a race to make him a comical figure over the last few weeks. Many talk as if he appeared on the national horizon only with his "Orewa" speech. In fact, Don Brash was a household name long before he was elected to parliament in the same (2002) intake as I was.
It is only a few months since he was cited, by Nobel Prize-winning economist Milton Friedman, as a world leader amongst Reserve Bank governors. His principal achievement has been to significantly reduce inflation in the New Zealand economy. It seems a world away, but before the fourth Labour government brought in The Reserve Bank Act, inflation above 10% was considered the norm. This made saving money a mug's game - but nobody could think of how things might be changed without a major recession. By giving the Reserve Bank independence the Lange/Douglas government hoped to remove temptation for future Ministers of Finance to increase the money supply in election years. The Act has been copied overseas, most famously by British Prime Minister Tony Blair within days of his election. The then Minister of Finance, Sir Roger Douglas, chose Don Brash to be Reserve Bank governor, introducing him to public life. At the time it was seen as a magnanimous gesture, as Dr Brash had previously been a National Party candidate.
Don Brash was successful in his battle against inflation. Although this is generally seen as a good thing, the process wasn't comfortable, and our mortgage interest rates were too high for a long time. Bob Jones wrote a persuasive book called "Prosperity Denied", suggesting that as Governor, Don Brash was being excessive in his desire to throttle inflation permanently from the New Zealand psyche.
So politics was Don Brash's second career, but his success over inflation may be the more enduring legacy.
Milton Friedman (1912-2006)
One of the world's most influential economists died recently. Milton Friedman had made the study of money, and its relationship with government, his career.
I found his explanation of the Great Depression very interesting. It began as an ordinary recession but was turned into a calamity by the actions of the American reserve bank, the Federal Reserve. The Federal Reserve allowed trading banks to go bankrupt causing the supply of money to fall. Bankruptcies multiplied, wages fell, trade was restricted and, worst of all, desperate nations turned to fascism as an answer.
Friedman's analysis is now widely accepted. When his 90th birthday was celebrated at the Whitehouse, the now-Governor of the Federal Reserve, Ben Bernanke, admitted the flaw in policy at the time, saying to Friedman "you're right, we did it. We're very sorry."
Friedman continued to write and lecture until the end, knowing that his advocacies of open markets, personal responsibility, and individual choice could bring greater freedom and prosperity to millions around the world. With his wife Rose, Milton spoke to ACT's Annual Conference in Wellington - via video link - in 2002.
One of the many things which should be remembered about Milton Friedman was his irrepressible optimism. After all, we have much to be optimistic about. As Shakespeare (and not Nicky Hager) wrote - "truth will out", and the ideas that Milton Friedman represented will survive far beyond our own lifetimes.