The governor of the Reserve Bank upbraided the head of one of New Zealand’s largest think tanks last year in a clash that included claims by the governor of “ongoing character assassination” and a refused apology.
Governor Adrian Orr berated New Zealand Initiative chairman Roger Partridge by email for grievances including “stating I have a gambling problem,” and for “mocking [the Reserve Bank’s] use of a Māori mythology”.
In a meeting of happenstance in the Koru Lounge at Wellington Airport and again at Auckland Airport following a flight, Orr also volubly complained to NZ Initiative executive director Oliver Hartwich.
Hartwich described Orr as “agitated and clearly unhappy. He made his position very clear, he was deeply unhappy with any criticism he perceived he got from us [the NZ Initiative].”
This is not an isolated incident it seems.
Orr’s exchange with Partridge fits a broader pattern of hectoring his critics last year. Reacting to a May blog post by academic and bank capital expert Martien Lubberink, Orr penned a critical letter and then threatened to share it with Lubberink’s colleagues.
He also took to task journalist Jenny Ruth at a press conference over a news story he didn’t agree with.
Sources, who asked not to be named, described heated phone calls with Orr, some at odd hours, and a pattern of publicly belittling and berating those who disagreed with him at conferences and on the sidelines of industry events.
Orr’s behaviour, they said, coloured the submission process and chilled rather than facilitated participation by industry.
This behaviour would be alarming by any public servant, but especially by the Reserve Bank Governor.
The Reserve Bank Governor is without doubt the most powerful unelected public official in New Zealand. He is not just CEO of the Reserve Bank but he effectively determines the official cash rates and hence interest rates, which can have a massive impact on every household and business in NZ. His decisions on banking regulations also has massive impact, exponentially more than any other public servant.
My rule of thumb is the more powerful the position you hold, the more thick skinned you need to be about criticism.
Orr seems to think the criticism of him is so unprecedented that he has to respond aggressively to critics. Well I think he needs to study history. When Don Brash was Reserve Bank Governor, he also attracted huge amounts of criticism, some of it quite personal. Did he shout and threaten his critics? No. In fact what he did was tour up and down New Zealand speaking to scores of meetings to try and persuade and engage. He got a lot of abuse in those meetings but he was always unfailingly polite.
Here’s an article from 2002 about Brash, including a comment from Orr:
As he steps down there is widespread praise from money markets for being a pioneer in the battle against inflation.
“Because of that he’s been a very controversial figure and perceived internationally as the type of ‘Winston Churchill’ of inflation fighting,” jokes Adrian Orr, WestpacTrust chief economist.
But Brash has his critics, like the Employers and Manufacturer’s Association’s Alasdair Thompson who say the Reserve Bank kept interest rates too high.
“We think that it has restricted economic growth to some extent throughout that period, but he’s been hugely successful in bringing inflation under control,” Thompson says.
But Brash has never courted popularity.
“A popular central bank governor is almost certainly a bad one,” he once said.
Despite his apparent independence, left-wing politicians disliked the former Reserve Bank Governor’s anti-inflation tactics, sentiment voiced by Jim Anderton at the time of the 1999 election campaign.
“The person who really cares about his job is Don Brash and he’ll be the only one who’s got one left in New Zealand; everyone else would have left,” Anderson said.
So my advice to Governor Orr for the next time he feels someone has unfairly criticised him is to take a deep breath and ask “What would Don Brash do”.