KEY POINTS:
Michael Cullen stands accused of sabre-rattling because he seeks solutions to the currency crisis which run counter to established orthodoxy.
Well good on him. That's what we pay the Finance Minister to do.
When the New Zealand dollar has been gamed so obviously by offshore speculators that even blue-chip investors like Warren Buffett's Berkshire Hathaway can boast in their annual reports of the multi-millions of dollars they make playing our small nation's currency, only a mug refuses to investigate options.
Unfortunately the body politic in this country has become so entrenched that rationality has flown out the window.
A lot of poppycock has been spouted since Cullen reminded financial markets of the reserve powers he has under section 12 of the Reserve Bank Act to override the central bank's sole focus on price stability. But it is unfathomable that a finance minister cannot float possible mechanisms such as a levy on fixed interest mortgages, or capital gains taxes. Or even expanding the Reserve Bank's monetary policy focus to include, as an objective, the stability of our currency, the maintenance of full employment here, or the maintenance of our economic prosperity and welfare of our people (as happens in Australia) without provoking an insular backlash.
We're not alone in facing such problems. There has been plenty of debate in international forums this year over how small countries can "escape" the US dollar effect, and, how they can protect their currencies from speculation by major investors armed with wads of dough from a world awash with cash.
Much of the debate is sophisticated. But any attempt to have a conversation which focuses on how realistic is it for a small country to continue to have a free-floating dollar, or continue to run an interest-rates policy that results in the cash sucked in from international speculators pushing our currency up simply runs into an ideological wall.
Unfortunately we have been conditioned too much by the doctrine of the current Reserve Bank Governor's predecessor to look outside the box and examine what may have changed since Don Brash made a virtue out of washing his smalls in hotel rooms to ram home his anti-inflation mantra.
The National Party - led by a former currency trader - is indulging in political point-scoring at the expense of New Zealand's prosperity.
It's hard to credit the cynicism which is displayed daily in Parliament. Just three months ago John Key went public warning this portending crisis required both main political parties to put their heads together and come up with a creative solution.
He wanted to stem the massive flows of hot money into New Zealand that were "pumping the exchange rate to crippling levels". He told me the New Zealand economy was particularly exposed because of the impact of Japanese retail investors and major currency speculation on the back of the US$1 trillion of hot money washing about in Asia.
"We're very happy to work with the Government on this - it's totally a capital markets and hot money issue."
Since then the currency has gone through the roof and shows no signs of abating.
Not surprising perhaps when some of the heat is due to a depreciating US dollar - some of it to speculation by offshore investors drawn to our currency by the usurious interest rates the central bank offers.
But the National Party leader is no bunny.
Key has managed international currency flows. He's speculated against other nations' currencies and no doubt New Zealand's. He knows all the tricks of his trade. He's skilled in picking the inflexion points on currency swings and knowing just when to capitalise by making a deal or quitting a position.
That's why he should be getting round the table with Cullen - as he previously offered - instead of allowing his party to impose a slow Chinese water torture on the Finance minister.
Two months ago, Key was more than willing to have that conversation with Cullen. In fact he was gagging for it. He had ideas - none of which he wanted to publicly disclose in case the market became prematurely alerted.
But these days he won't even play ball. Every time the Finance Minister floats a possible change to the status quo to try and bring an abrupt stop to the obvious gaming, Key falls in behind his deputy and Finance spokesman Bill English.
Do National's strategists seriously believe their prospects of tipping Labour out at next year's election will be enhanced if the currency crisis changes into a recession? That is exactly what Key feared two months ago.
This after all is a party that delighted in bloodying Labour's nose by refusing to support moves for a joint therapeutics agency with Australia. But voters won't - and shouldn't - thank National if it continues to play politics on a truly significant issue.
Time for Key to show some leadership and make good on that promise to get round the table with Cullen - this is much more important than photo-ops with Helen over anti-smacking legislation!
