On the Education of a PM as a Crony [updated]

The place in which PM John Key learned about business was a business dedicated to sucking the marrow out of special privilege, says Charles Morris from Reuters (linked to this morning by David Chaston at Interest.Co.NZ).

Merrill Lynch were the crony’s crony, and they died of it.

Between 2001 and 2008, [says Chaston] …. they paid out US$50 billion in salaries and bonuses, and sold out to Bank of America.

A “sell-out” made at the point their modern business model had collapsed, at the height of the 2008 Crash. Indeed,

after a proper accounting it seems even after the terrific profits made during the financial boom, Merrill had actually lost US$21 billion – which … must be some sort of record in the annals of unproductiveness.

Neither Chaston nor Morris points clearly enough to the reason Merrill, Bear Sterns, Lehman  and others  investment banks thought they could get away with the profligacy: their cosy relationship with central bankers allowed them to sit athwart the money-printing sluice gates and take first sip. And nor do they question the need for counterfeit capital to continue being pissed out.

But the story makes me wonder, as it did Hugh Pavletich, about the place and their culture and the institutional cronyism that made our Prime Minister and his fortune.

Does this explain why Prime Minister John Key, a product of the Merrill Lynch culture, favours looking after the elites and special interests, often at the expense of the wider public ?
Would Mr Key have the ability to make that $40 / $50 million as an entrepreneur ? Or simply by ingratiating himself with the right people at the right time …. as he needed them ?
Vanity Fair published an article some years ago on the Blundering Herd Merrill Lynch culture, suggesting its  
“raging case of Goldman Sachs envy … began a blind stampede into unprecedented risk.”
Is this why we have A Blundering Government ?
Late 2012, for example, I explained how “Can-Kicker Key” had shut down progress on essential housing / local government reform issues … although by late 2013 with public pressure snapping at his heels he began to  change his tune.
It is still only talk though … like the eyewash Mr Key dished up to Mary Kissel of The Wall Street Journal back early 2009 and spruiked by Kissel as “New Zealand's Prime Minister John Key Takes a Supply-Side Approach to the Global Recession.”
How much longer is Mr Key going to get an “easy ride” ?

UPDATE: If you want to some background on the cosiness of investment bankers and central bankers, and the cost to the rest of us, you could either Google “Cantillon Effects”; read my own 2011 post ‘#OccupyWallSt movement, and their single grain of truth’ (i.e.,“the presence in the market of a vast gang of dishonest bidders and dishonest buyers, a gang that bids and spends dollars created out of thin air in competition with their earned dollars”); or ponder George Reisman’s insightful 2008 article ‘Credit Expansion, Economic Inequality, and Stagnant Wages, which points out…

Credit expansion is responsible not only for the boom-bust business cycle, as Mises showed, but also that it is a major source of artificial economic inequality and sharply increases profits relative to wages. These are processes that come to an end and are actually thrown into reverse as soon as credit expansion stops and the recession/depression that is its ultimate consequence begins...
    In the last two episodes of major credit expansion, however, and over the last several decades as a whole, real wages have largely stagnated. This stagnation is the result of massive government intervention into the economic system that undermines capital accumulation and both the demand for labour and the productivity of labour…