It being New Year's Day, it's time for me to review my predictions for 2004, and list my new predictions for 2005. First, the review:

George W. Bush will soundly defeat his Democratic opponent, Howard Dean, in November. The Republicans will maintain control of both houses of Congress, with roughly the same margins as today.

A mixed score for this one. I got the winners right in all cases, but overstated the presidential margin, understated the congressional margin, and failed to predict the Dean collapse of early 2004. Perhaps if Dean had kept his mouth shut....

Paul Martin will not win a majority government in a Canadian federal election.

My big winner for the year. One commenter even asked if I was "joking". Nope--just being my usual serious-but-eerily-insightful self.

US troops will still be in Iraq in substantial (though somewhat reduced) numbers at year's end.

Did I say reduced? Silly me. I meant increased, of course.

Of the four leaders I mentioned last year, all will remain in power by year's end (Chavez by falsifying or ignoring the results of the upcoming referendum), barring death by natural or accidental causes.

To refresh your memory, those leaders were Yasser Arafat, Kim Jong Il, Ayatollah Khamenei and Hugo Chavez. Arafat died peacefully in a hospital near Paris, and the rest are still going strong. (This is a fairly easy prediction to make, of course, but it's meant to counter the remarkable number of commentators who like to predict the imminent ouster of one or another of these characters each time he appears to be encountering a patch of political turbulence. Plenty of people were expecting a defeat for Chavez in the past year's referendum, for instance.)

This year the overpriced major American markets will experience a net decline (and this time, I mean it!). The US dollar will also fall, relative to foreign currencies. Inflation and interest rates will tick upward, in reaction to the falling dollar--but not by that much. Economic growth will slow substantially, but will not tip into recession until after the election.

Another mixed bag. The markets ticked upward again, earning people who don't follow my advice yet another year of respite from the inevitable decimation of their savings. Growth also outstripped my prediction. The dollar, inflation and interest rate predictions, on the other hand, were pretty good.

Conflicts between the US and Europe will be overshadowed by conflicts between the US and China (over trade, exchange rates, weapons proliferation, North Korea, and human rights).

Well, neither set of disputes had a particularly high profile in 2004, although I suppose the American election did temporarily highlight European hostility to the current US administration, making my prediction, technically speaking, "wrong". (Or, as I prefer to say, "premature".)

Now for this year's predictions:

There will be a major effort to rejuvenate the Middle East peace process, following the upcoming Palestinian Authority elections. The effort will come to absolutely nothing, and attempted Palestinian terrorist attacks and Israeli military incursions into Palestinian towns will be roughly as frequent at the end of 2005 as they are today.

The coming election in Iraq will completely change the characterization--though not the actual character--of the American involvement there. A new Iraqi government, dominated by the Shiite slate, will assume power, and invite the US military to remain to continue its reconstitution and training of the Iraqi army and security forces, and to help protect the country from "insurgent groups", who will increasingly be labeled as foreign-supported and even foreign-staffed. Syria will be the main target of this rhetoric, because it's much weaker than Iran. But no action beyond diplomatic and economic sanctions will be taken, partly because the US is loath to expand its military burden, and partly because maintaining the Syrian fig leaf will be too useful for both the US and the new Iraqi government as an excuse to support the continued presence of US troops.

Messrs. Chavez, Khamenei and Kim will remain in power yet another year, barring natural or accidental death. Likewise, Kofi Annan will survive the oil-for-food imbroglio and remain UN Secretary General.

The US stock markets will decline overall in 2005. The real estate market will (finally) peak and decline. Inflation will be kept under control by lower oil prices and rising interest rates, but the dollar will continue to fall--though somewhat less precipitously--and economic growth will slow accordingly as interest rates, the drop in the markets, and the ripple effects of the slowdown in China all take their toll.

An event will occur in 2005 that will blossom into a huge, crippling scandal for US president Bush--though possibly not until 2006.

A scandal will also damage the career of television psychologist "Dr. Phil" McGraw.

Note: These predictions were made on a closed course by an untrained non-professional. Do not attempt to emulate them, if you hope to retain a shred of your dignity.