KEY POINTS:
John Key was almost effervescent as he talked about the upcoming inauguration of Barack Obama as President of the United States.
"You can look back in just a short period in their history when African- Americans were slaves ... having President Obama installed in the White House is a huge, monumental step for the United States," Key noted during his first Beehive press conference for the year.
"Americans should be very proud of that day."
The Prime Minister had felt Americans' thrill and excitement as they looked forward to Wednesday's historic event while he was holidaying in the US at his Hawaiian home.
He had also heard first-hand from other "big-hitters in town" that Wall St was still at a standstill with big banks who have been propped up with US taxpayers' funds continuing to curtail lending.
But he was sensitive enough to the new President's day in the sun - and his own hope that New Zealand will continue to strengthen its relationship with the US on Obama's watch - not to add, in typical Key sotto voce fashion, "the reality check comes later, mate".
Like Obama, Key cruised to a relatively easy victory in last year's election. But both politicians must feel in their inner selves that winning against opponents who were on the their last political legs was a breeze compared with the challenges that lie ahead as they seek to govern through the most challenging times for at least half a century.
Key and Obama have youth on their side. This must embolden them to push the boat out with new ideas and policies - some of which they road-tested during their respective election campaigns - even if not all their prescriptions pass the fiscal road test.
The last thing either country needs is for its political leaders to become frightened of their own shadows - too gutless to make a decision in case it proves to be the wrong one.
There will be failures along the way in these testing times. Some policies will have behavioural spinoffs that either keep people in work for longer or help them retrain for other jobs. But there is no way any government can stem an outgoing tide.
Obama's oratorical skills will inspire Americans during their tough times. Key is not an orator. But he does connect.
Staying sunny, keeping his "smiley face on" might seem banal but it will help New Zealanders stay positive. However, he also needs to remind Kiwis, as he said in his election night speech, that "we have the ability to make our lives better".
So while Key and Obama will feel a slight chill of disappointment as they confront the reality of their rapidly slowing economies and the worsening job losses that lie ahead, and the difficult task of meeting heightened expectations caused by their respective fiscal stimulus packages, they have to stay focused, even though they will face criticism because their policies fail to stem the tide.
As outgoing US President George W. Bush said, "It is the burden of
leadership."
Obama and the Democrats are already seeking Congressional approval for another fiscal stimulus package. But there are no guarantees that consumer demand will return any time soon. The Bush Administration tried that by pumping cash into companies such as General Motors, but no one's buying cars. That requires the banks to come to the party.
The inevitable result for New Zealand and the US will still be escalating deficits, snowballing government debt and more cautionary words from the Standard & Poor's of this world.
The cold reality is there are no quick fixes for the US economy, or our own. The external deficits both countries sport mean neither economy will recover until deep global difficulties are worked through.
But the US cannot be allowed to fail - whereas New Zealand is so small that it could.
That's why politicians on all sides, particularly in New Zealand, should keep their feet grounded.
Labour leader Phil Goff opportunistically castigated Key for being absent from the fray during the first two weeks of this year and suggested New Zealand should be mimicking the strategies undertaken by other governments to confront the international recession.
This is rich from a politician who was part of the government that presided over the huge explosion of private household debt in New Zealand and did nothing to contain the debt explosion or the out-of-whack finance sector in which so many lost money.
Key would be better off swallowing his pride and listening to Act MP Sir Roger Douglas, who has confronted difficult economic times and knows there are no easy options. Beyond that, we want our Prime Minister to tell us the truth, however unpalatable.
