Ken Henry joins the oligarchs

Apparently Ken Henry is to succeed Michael Chaney as NAB chairman at the end of this year. I’m a bit torn by this. On the one hand, Henry is a sensible policy-maker with a strong sense of the public good, and may be well placed to help NAB navigate the very difficult times ahead. On the other he will give the bank even stronger inside ties to regulatory bodies and, if not trusted to behave with absolute integrity, further undermine governance of the banking system.

Henry was already a board member but the chairmanship is an altogether greater responsibility.

I guess we’ll have to reserve judgement but it’s a worry.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Did you know the MB International Shares Fund has returned an average of 17.1% per annum and the Tactical Growth Fund an average of 10.4%? Register below to learn more:

Latest posts by Houses and Holes (see all)

Comments

  1. ” Henry is a sensible policy-maker with a strong sense of the public good”
    Oh Baloney!!!!! This is the moron who, with Kevin Rudd, raised this whole idiocy to a new level.

    “,may be well placed to help NAB navigate the very difficult times ahead.”

    You’re kidding right? This is the bloke who justified his budget projections with the immortal exacting quantitative analysis “Well That’s what happened last time”

    • With all due respect, I think you need to cast an eye over all the work he did (eg: like the Henry report) and accept that most of his views on what needed to be done were not supported by government. Many of the reforms people bang on about here were supported by Henry.

      Of course I am worried about his latest posting. Co-opting past regulators/public servants is standard operating practice for large corporates. The only way I see at the moment to stop this is to pay public servants more, improve job security (ie: end the political culling/appointments), put in place restrictions on employment in the private sector and a big pension at the end of their tenure which ensures they are looked after for life. The way the system is set up, I see no other way to ensure their loyalties are not compromised and that their “insiders” view is not used to subvert the systems after they leave. Good luck trying to get that sort of reform through.

    • Now we find out Fat Joe is behind this: Thought So. WW
      The RBA “has lost all respectability – if there was any left to lose “Accumen Management chief investment officer Ken Veksler wrote .
      “The currency had come down, pre-empting the rate cut, thanks to reports in the Australian media, If Governor Glenn Stevens thought he was giving a master class in central bank communication, he’s sorely wrong.
      Rather, WHAT HE’S DONE IS BOW TO POLITICAL PRESSURE and left himself without any dry powder whatsoever. The RBA has lost all respectability – if there was any left to lose

      • Explains why he was so happy cheering and asking people to borrow more and invest after the cut announced…

      • The people running the RBA along with the political apparatchiks have lost respectability imo.

        Glen time capsule – September 14, 2009 Prospec

        “Dirk Bezener, the academic who collated the 12 economists who predicted the GFC, wrote in the Financial Times Why Some Economists Could See the Financial Crisis :

        Glenn Stevens, governor of the Reserve Bank of Australia, said: “I do not know anyone who predicted this course of events. But it has occurred, it has implications, and so we must reflect on it.” We must indeed.”


        Neo-classical economists only focus on two factors of production – capital and labour. Bezener misses the big one in his flow-of-funds analogy. The imperative question is – what was the money was borrowed for?

        Land – predominantly. Land values in Australia are twice as big as the ASX.”

        http://www.prosper.org.au/2009/09/14/economists-who-dominated-the-gfc-predicitons/

        Skippy…. Drunks looking for the car keys under a streetlamp…..

      • Addtionaly – On God and the market, faith and finance, prayer and prices

        “FRANK QUINLAN: As you’ve outlined there are tensions between full employment and inflation. There are tensions between the incomes of low wage earners; people on minimum wage and employment opportunities.” – skip here…. QTM wankery at its most maleficent.

        “ETER CAVE: In the New Testament, Mathew says you can’t serve two masters, both God and Mammon. But the Reserve Bank chief believes he is doing God’s work.

        Glenn Stevens’ comments raise the question of whether a belief in rational people pursuing their self-interest, sits alongside Christian beliefs of charity and social justice?

        Our economics correspondent Stephen Long spoke to some Australians who have a faith in God and the market; practising economics and religion, and he prepared this report.

        STEPHEN LONG: It wasn’t quite the line from the Blues Brothers, “we’re on a mission from God”, but it was close.

        GLENN STEVENS: If you are a Christian God has given you certain capabilities to do a job, and the bible teaches that you should do that as if you were doing it for Him, because you are.

        STEPHEN LONG: Glenn Stevens the Reserve Bank governor on his religious beliefs. Mr Stevens is a guitar playing Baptist from Sydney’s Sutherland Shire, and an economist who happens to run what may rank as the nation’s key economic institution.

        You might joke that it’s a neat fit; that neoclassical economic theory and Christianity are both faith-based. But tensions between modern economics and religion are apparent, both in theory and practice.

        PAUL OSLINGTON: Contemporary economics has a particular view of the world. Economists tend to be individualists; when we see something out the window we like to think about it in terms of the actions of individuals.

        STEPHEN LONG: Professor Paul Oslington holds a unique academic double; a joint chair in economics and theology at the Australian Catholic University.

        He spoke to Radio National’s Encounter program about the tensions between theology and mainstream economic theory.

        PAUL OSLINGTON: What we should be aiming for is the maximal satisfaction of individual’s preferences, so individuals are the own judge of their welfare and any attempt from philosophers or theologians to make judgements that are not part of people’s preference functions is somehow illegitimate. And that’s the standard view among economist but it’s a very strange view indeed.

        STEPHEN LONG: But Christians who practice economics say the two disciplines can learn from each other.

        ROBERT FITZGERALD: Theology should pay more attention to economics and probably is and economics should absolutely pay a little more attention to theology.”

        ETER CAVE: In the New Testament, Mathew says you can’t serve two masters, both God and Mammon. But the Reserve Bank chief believes he is doing God’s work.

        Glenn Stevens’ comments raise the question of whether a belief in rational people pursuing their self-interest, sits alongside Christian beliefs of charity and social justice?

        Our economics correspondent Stephen Long spoke to some Australians who have a faith in God and the market; practising economics and religion, and he prepared this report.

        STEPHEN LONG: It wasn’t quite the line from the Blues Brothers, “we’re on a mission from God”, but it was close.

        GLENN STEVENS: If you are a Christian God has given you certain capabilities to do a job, and the bible teaches that you should do that as if you were doing it for Him, because you are.

        STEPHEN LONG: Glenn Stevens the Reserve Bank governor on his religious beliefs. Mr Stevens is a guitar playing Baptist from Sydney’s Sutherland Shire, and an economist who happens to run what may rank as the nation’s key economic institution.

        You might joke that it’s a neat fit; that neoclassical economic theory and Christianity are both faith-based. But tensions between modern economics and religion are apparent, both in theory and practice.

        PAUL OSLINGTON: Contemporary economics has a particular view of the world. Economists tend to be individualists; when we see something out the window we like to think about it in terms of the actions of individuals.

        STEPHEN LONG: Professor Paul Oslington holds a unique academic double; a joint chair in economics and theology at the Australian Catholic University.

        He spoke to Radio National’s Encounter program about the tensions between theology and mainstream economic theory.

        PAUL OSLINGTON: What we should be aiming for is the maximal satisfaction of individual’s preferences, so individuals are the own judge of their welfare and any attempt from philosophers or theologians to make judgements that are not part of people’s preference functions is somehow illegitimate. And that’s the standard view among economist but it’s a very strange view indeed.

        STEPHEN LONG: But Christians who practice economics say the two disciplines can learn from each other.

        ROBERT FITZGERALD: Theology should pay more attention to economics and probably is and economics should absolutely pay a little more attention to theology.”

        http://www.abc.net.au/pm/content/2010/s2862905.htm

        Skippy…. well I hope that boosted everyone confidence… have a big cuppa of faith…

      • Well only Devine Intervention is going to allow for a soft landing from that monstrosity of a debt bubble.

        Perfect guy for the job

      • Skippy, I like the drunks metaphor, been there my self.
        But what has really happened is that these pricks have set the altimeter to 100. WW

      • @8~

        Using debt to pay for rents is insane, tho some made fortunes.

        @WW,

        Some seem to be operating on the Cecil B. DeMille concept of reality…. big storm… everyone and their dog holes up in temple…. destruction ensues… black and white cinematographic parting of the sky’s w/ brilliant beam of light shining down on the – virtuous – survivors. en fin~

        Skippy…. sadly from a historical perspective… these sorts all run into the temple [blind group think] and either the Universe completely flattens the joint or the Barbarian hoards burn it down, with all inside.

  2. How can we trust the decisions made by any of our financial regulators, if their top brass walk into a lucrative board seat at one of the organisations they were regulating once their term expires.

    MB has been banging on about macroprudential for how long? It makes complete sense. It is in the public interest. Yet the call rests with our regulators. Why are our regulators immune to economic common sense. Regulatory capture maybe???

    • same dimension with regard to Defence unfortunately. ITs a pig trough from one end of Canberra to the other….

      the military/industrial complex is not just an American blight

  3. “Henry is a sensible policy-maker with a strong sense of the public good”.
    Hahaha .. Good one !

  4. An intelligent and interesting thinker, good humoured, well connected. Sounds about right for job to me.

    • 3d, haven’t you got some 457 workers to find work for picking fruit/veg (@ the award rate, of course)?

  5. Oh well – at least he has a background in nationalisation of assets – he will be able to live out his dream

  6. Crocodile Chuck

    He’s no Michael Chaney, let alone a Don Argus.

    And the optics are horrible.

  7. ceteris paribus

    Hasn’t he got something better to do? Read a book, do some gardening? Sit quietly and do some real thinking?

  8. Ken Henry is no longer an employee of the Cwlth and is entitled to do what he wants. It’s also worth noting that while he served the Rudd Government, he was appointed by Costello in 2001.

    Anyway it’s good that some Australian companies choose to have former high level public servants on their boards, in my opinion. Many Australian businesses seem ignorant of the public services role and processes, particularly how the PS relates to the government of the day, so having a former treasury secretary on the board of NAB seems a pretty good fit.

    • Its worked so well for the SEC in America imo… revolving door thingy… bad form to take out an ex class mate or those you and yours socialize with…

      Skippy…. puts a dampener on invites to socially beneficial soirees… screwed up incentives… see social psychology.

      • It works completely differently in the US and is like comparing apples with oranges.

        For a start there is no ‘revolving door’ at Treasury. Prior to joining the NAB Board, Ken Henry had been a career public servant. As had Ted Evans, the Treasury secretary who preceded him and who became chair of Westpac. Martin Parkinson was also a lifelong public servant.

  9. Ken Henry lost me when he went into a pub in QLD after rooting out hairy nosed wombats & had a beer with a bloke who ranted about tax & KH came out saying what a great thing it was to catch up with real Australia. Turned out the guy in the pub was a total tax fraud. Hadn’t lodged a tax return in years. Actually didn’t pay tax. Go figure, (I guess that’s real Australia!) Should be a real good sort to have as the Chair of Nab Bank. Actually the guy in the pub might be better. LOL! Total joke. NAB is the bigger joke, that bank is absolute Crap!