New Jersey, with its historically reckless fiscal management and high dependence on Wall Street tax revenue, has proven more vulnerable to the global financial turmoil than most peers around the country. The crisis therefore not only played a decisive role in Governor-Elect Chris Christie's November victory, its deeply felt pain has also been correctly identified as providing favorable tailwinds for a pro-growth, pro-reform economic agenda. However, these favorable tailwinds may not carry as far into Christie's gubernatorial tenure as some around Trenton may believe. As 2009’s bumper Wall Street results have signaled, the financial hurricane is over – even though it has clearly left significant wreckage in its wake.

Lost amid the political furor over record bonus payouts has been the remarkable reality that capital markets, which had been badly strained for approximately two long years, have to large extent recovered. This semblance of normalcy in capital markets will in due course mean at least some recovery in access to finance for businesses seeking to expand their workforces, families seeking to buy homes and even consumers seeking to splurge. Consequently, most forecasters expect the U.S. economy to expand at a healthy 3% clip in 2010.These factors raise the possibility that as tax revenue again starts flowing into Trenton’s coffers, the state’s actual FY2011 deficit may not be as dire as currently projected.

It took time for the pain on Wall Street, where the crisis originated in summer 2007, to reflect itself on Main Street and public finances; recall the widespread public sentiment that the crisis was confined to being "a Wall Street problem" which persisted deep into 2008. Similarly, the sense of recovery on Main Street and in Trenton will lag the recovery in capital markets, which began in March 2009. However, as the sense of pain inevitably dissipates during the course of 2010, Christie’s leverage over entrenched interests – as well as the keen attention his pro-taxpayer agenda currently enjoys from an unusually watchful electorate – has the potential to revert to apathy and even hostility.

The bottom line is that while the incoming administration may have a historic opportunity to push through needed reforms, the political window for pushing through those changes could rapidly narrow. As the economy recovers and the electorate’s anger wanes, entrenched interests will feel less pressure to make long overdue concessions. This reality should dictate a sense urgency from the outset for Christie’s agenda as well as impose the political discipline to prioritize the most impactful and achievable reforms. This is undoubtedly a challenging task; however, the opportunity to push through dramatic changes through 2010 and yet still be in position to benefit from a fortuitously timed economic recovery should provide more than enough motivation for Christie to get it right.