Muldoon sought Reagan’s help in NZ election

David Fisher has been searching the database of CIA files that has just become available online. It shows that Robert Muldoon sought help from President Ronald Reagan to help him get re-elected in 1981.

Inside the top secret CIA files on New Zealand – who they spied on and what they said

The papers repeatedly mentioned Muldoon’s appreciation of the relationship with the US and a 1981 briefing from the CIA to the White House showed it was reciprocated.

A memo to President Reagan pointed out Muldoon had a “difficult” election that year and the visit to the US was an “opportunity to show the New Zealand people that he is an international leader of some stature who is taken seriously in Washington”.

It was suggested Muldoon would welcome an “expression of hope” from President Reagan “that he will emerge victorious”.

I don’t know whether Reagan publicly supported Muldoon. He had taken over as US president in January 1981.

National won the November 1981 election with a majority of just one after a recount gave them a 150 vote majority in the Gisborne electorate.

1981 was dominated by the Springbok tour, and National campaigned on their ‘Think Big’ policy, but a word from Reagan (if he gave it)may have made a difference.

By the time of the key 1984 election, the CIA prepared a full biography of Muldoon.

“Now in his 14th year as Minister of Finance, he fancies himself as one of the senior statesmen on the international financial scene.”

It described Muldoon’s success with NZ’s economy as “limited” but said it had “not deterred him from preaching international monetary reform to world leaders … at every opportunity”.

Muldoon’s ‘success’ was less than ‘limited’, his mismanagement and interventions had just about wrecked the New Zealand economy.

The country’s economy was in a dire situation when National under Muldoon lost the snap (or schnapps) election in 1984 in a landslide to Labour under David Lange.

The CIA also warned that a Labour victory “would create difficulties in the US relationship”. It was also concerned at the resurgent nuclear-free movement which was being pushed by Labour.

Self interest. The nuclear ships ban that eventuated led to the US creating difficulties for themselves in their relationship wit New Zealand, pretty much out of spite.

“Unable to come up with policies of its own to cure New Zealand’s economic ills, Labour sees political benefit in identifying with a fear of nuclear contamination that is widespread and growing in New Zealand and which spans the political spectrum,” the CIA report stated.

So Labour duped the US just as they duped the New Zealand voters.

Before Lange was sworn in a foreign exchange crisis arose. The NZ dollar was overvalued and following the announcement of the snap election in June traders started selling it off on the assumption that Labour would win the election and devalue the currency.

Muldoon refused to follow Lange’s instruction to devalue the currency, making the dollar’s situation more untenable, but eventually relented.

Lange’s government had to deal with a severe balance of payments crisis as a result of the deficits fueled by Muldoon’s  two-year freeze on wages and prices and his maintenance of an unsustainable exchange rate.

This prompted the incoming Minister of Finance Roger Douglas to launch into economic reforms that were largely successful in starting a cure of New Zealand’s economic ills (Muldoonitis).

It would be interesting to know whether it was common for New Zealand politicians to seek public support from US presidents in our elections, and whether any presidents openly chose sides.

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  1. “So Labour duped the US just as they duped the New Zealand voters.”

    Yes indeed! That particular Labour government duped nearly everyone. The Ratpack (or whatever you call them) of Douglas and Company even duped the Labour leader and most of the senior Party members … Imagine how duped Union leaders and unionised workers felt? The word “duped” just don’t cover it pal!

    “This prompted the incoming Minister of Finance Roger Douglas to launch into economic reforms that were largely successful in starting a cure of New Zealand’s economic ills”

    A disingenuous statement. “Prompted” is used wrongly and retrospective ‘spin-wise’ here – orh jeez, let’s just call it BullShit – presumably to keep the legend of the great Roger Douglas going … “Oh, if only he’d been allowed to ‘finish the business'” … to finish us off …

    More accurately: This excused and falsely justified the incoming Minister of Finance Roger Douglas to launch into pre-arranged, pre-planned, US-and-UK-backed, international financialist economic reforms as though NZ’s economic ills were simultaneously acute, chronic and terminal … which they were not …

    If you wanted to Roger a nation largely against their will – an action that if it occurred between individuals would be called ‘rape’ – remembering that being Rogered-economically was NOT the platform upon which Labour were elected – you might distract them with some nice ‘feel good’ stuff to ease the pain …. Nuclear Free sort of stuff …

    • Patzcuaro

       /  19th January 2017

      At least we live in the real world now where the economy responds to market forces. We manufacture or produce what people want rather what we think they should have.

      Now might not be perfect, but it was a shambles under the national socialists, aka the National Party, lead by Muldoon.

      • I disagree Patzcuaro. We live in a neo-fantasy world where geopolitical blocs trade amongst themselves in whatever they can produce cheapest – which essentially means at least labour cost – and assumed stability is actually maintained by force &/or threat of force – including so-called “intelligence” – and where the ‘real cost’ of global shipping, pollution and ‘risk’ is not factored-in …

        This makes it ‘appear’ as though national or “home” eco-nomic diversity and self-sufficiency is neither required nor desirable. What do we need a manufacturing sector for? We can export raw materials at minimum prices – due to minimum labour input – and import cheap goods created from ‘wage slave labour’ overseas … (export our labour ‘problem’ so to speak) …

        The word “globalisation” is just another neoliberal myth …

        Now isn’t perfect … neither was then … We could have found a balance between the two but we had to go with the US-UK-AUS-CAN *bloc* – the Friedmachiavellian pendulum swing – because the US is prepared to spend whatever it takes militarily to keep the neo-fantasy up on the screen … Market Forces regardless of the human and environmental cost … and regardless of the real geopolitical dangers …

        At DREAM WORKS, appearances are ALL that counts …

        • Patzcuaro

           /  19th January 2017

          From year dot people have traded. If one clan had an excess of some commodity they would have traded with another clan for something they needed. Same with farmers excess produce could be sold or exchanged for something that the farmer needed. Then the industrial revolution lead to specialization, you traded your labour for money to buy goods.

          This can now happen on a global scale because technology has reduced the cost of transport. Before the wheel you could only carry so much, more with a horse and cart etc.

          The imposition of law and order via some from of authority has been crucial, as you need a stable environment for progress. Law by itself is insufficient, you need order which allows personal initiative. China stagnated for centuries because they had law but no personal initiative, same with the Soviet Union.

          How is the Soviet Union and now Russia different to the US. They have been prepared to spend what ever it takes to be able to project their military power. But they have been vastly less efficient at it because they have been command economies.

          If everyone is able to use their personal initiative the best ideas are likely to bubble to the top. In command style economies if the leadership pick the wrong path your stuffed, eg Cuba ( not helped by US embargo), North Korea (would you rather live in North or South Korea).

          • @ Me – “We could have found a balance between the two …”

            To some extent we have, although it leaves out whole swathes of the population by following in the master-slave [or wage-slave] paradigm of history … We can’t seem to think beyond this ‘square’ … Market forces …

            In this we too have stagnated for centuries …

            There’s really no way of engaging in reasoned debate when your response to @ Me (above) is “would you rather live in North or South Korea?”

            I’d like to visit both to see if my experience told me what they’re truly like …

            I wonder how different everyday life is for a member of the Precariat in Aotearoa NZ, from life for a PRNK worker in North Korea ?

            “If everyone is able to use their personal initiative the best ideas are likely to bubble to the top.”

            Debatable. It depends what you mean by “best”, doesn’t it? Take Alan’s gas-fired possum trap for example. Is it the best idea? Mutant offspring of neoliberal industrialism – high priced, new-tech + branded consumerable-ism – public ‘development’ funding and Trustocracy field trial and usage funding … a strange kind of ‘free enterprise’ with massive free government publicity and Govt Dept &/or NGO return for the makers …

            What does Blazer say … Private profit … Public risk …?

            Return for the public can’t be measured financially since there is none … only cost … in one Taranaki field trial over 5 months $100 per possum killed … Nothing other than ‘beneficial outcomes for the Conservation estate’ or something … No sustainable possum fur or meat industries … little employment … minimum labour even for the owner of the trap … just ongoing expense …

            I agree with Brown … Its a form of poverty … not prosperity …

            • Patzcuaro

               /  19th January 2017

              North v South Korea? It would be interesting to see what would happen if free travel was allowed between the two. I suspect a stampede South.

              East Germany required a wall to keep it’s citizens in. People tend to flow towards the best place to live based on their judgement.

              Currently they are heading out of Africa and the Middle East not the other way round. The West may not be perfect but a lot of people seem to think it is better than where they currently live.

  2. PDB

     /  19th January 2017

    PG “Muldoon’s ‘success’ was less than ‘limited’, his mismanagement and interventions had just about wrecked the New Zealand economy”.

    Yes, otherwise known as the ‘good ole years’ that PZ, Trotter and the like want to go back to……..

  3. Anonymous Coward

     /  19th January 2017

    I think you’ve misread that article. Your headline should read ” MULDOON WAS OFFERED REAGANS HELP…..”

    The database is down at the moment, but the documents I read had the US worried that The New Zealand party wanted to withdraw from anzus, and Labour were going to close the ports to US ships, but a National win would ” mean a continuation of New Zealands strong ties with the US”.

    Click to access CIA-RDP04T00367R000301860001-5.pdf

    • Anonymous Coward

       /  19th January 2017

      Forgive me, I’m looking at ’84, not ’81. Though I’m sure when they’re declassified that every NZ Prime Minister has sent a request to meet the New President. Bill English has no doubt got his in the post right now.

  4. Patzcuaro

     /  19th January 2017

    I thought Muldoon allowed the Springbork tour to go ahead to enhance his chances of reelection. The tour would have gone down well in provincial New Zealand. They got their rugby plus the national government could look strong on the law and order issue.

    I think this more than an endorsement by a B grade Hollywood star carried the day. The 150 vote margin in Gisborne one of the perennial marginals under FPP bears this out.

    • PDB

       /  19th January 2017

      Yes, provincial NZ ensured Muldoon narrowly won in 1981 with the Springbok tour a major reason for their support.

      • Gezza

         /  19th January 2017

        I was against the tour. Chatted to a Baptist Pastor at a recent Rest Home booze-up. Young Air Force wallah at the time, said he was absolutely FOR the tour in 81, but thinks he was morally wrong now. Anybody else here change their mind?

    • FPP ensured Muldoon’s wins in both ’78 and ’81 as much as anything …

      “The 1981 election, once again through the vagaries of FPP – [the undemocratic electoral ‘weight’ of provincial NZ’s homogeneity in the ‘seat count’] – allowed Muldoon … to hang onto power, albeit by the slimmest of margins …When we examine the popular voting figures … Labour had again [as in ’78] received the most support from electors, 39% to National’s 38.7%. The stand-out performer … Social Credit … racked up a record tally of 20.65% … they were rewarded with the democratically outrageous total of just two parliamentary seats” – Chris Trotter ‘No Left Turn’ pg 273

      This led directly to electoral reform, which has now resulted in a kind of “trapped in the ‘New Right’ middle-way of neoliberal compromise in exchange for votes” syndrome …

      The ’81 Springbok Tour was another in our long series of National Shames …


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