2009 may not have been one of history's most outstanding years, but it was a pretty good year for this blog's annual predictions, as you'll see in this year's review and preview. First, the roundup of last year's list:

Barack Obama's first year in office will go as badly as his mentor's, as the sluggish economy and unresolved conflicts between the moderates and progressives within his own party undermines his popularity, making his cool, detached persona seem weak and indecisive. Republicans will be somewhat rejuvenated by being able to take responsibility-free potshots from the sidelines, although no particularly prominent GOP leader will emerge. More Keynsian "stimulus" spending packages and bailouts will be enacted into law, but other government initiatives popular among Democrats, such as health care reform, will fall victim to the party's internal rifts, with some Republican help.

Health care isn't quite dead, although it's far from a done deal. Otherwise, I'd say this prediction is pretty much spot-on.

Some time during the year, a reputable source--perhaps an intelligence agency or a defense think tank--will declare that Iran most likely has already produced at least one nuclear weapon, and soon will produce more. Little attention will be paid. Likewise, Iraq will all but disappear from the news, as will Afghanistan and Pakistan, despite continuing unrest there. Domestic issues--particularly economic ones--will dominate public attention, and foreign news will focus on trade and economic matters, such as the fate of China's export industries and the Euro's troubles.

This was my only prediction to miss the mark badly. While evidence of Iran's progress to the brink of nuclear weapons production has piled up relentlessly, I don't know of any authoritative claims that Iran has actually succeeded in building a nuclear weapon. And I failed to anticipate the unrest following the June elections in Iran, as well as the deteriorating situation in Afghanistan, which kept those two countries, as well as Pakistan (though not Iraq) still firmly entrenched on the front news pages.

Stephen Harper will continue to hobble along with his minority government in Canada. Bibi Netanyahu will become prime minister of Israel, but in a coalition with Kadima and other parties of the center and right.

I underestimated Tzipi Livni's remarkable combination of personal ego and political incompetence, which caused her to gravely sabotage her own career by refusing to join Netanyahu's coalition. Otherwise, another pretty good prediction.

Hamas and Hezbollah will lay low following Netanyahu's election, quietly building up their military strength as they did during most of 2008. They will take advantage of the inconclusive outcome of the current Gaza operation, which will have included a limited ground invasion that damaged Hamas but failed to dislodge its de facto government, and will have ended with a ceasefire agreement that effectively restores the status quo ante. Netanyahu will thus lack a pretext--or support from an exhausted, cynical Israeli public--for a more decisive engagement, even as the long-term threat on both fronts quietly builds.

As flawless a prediction as I've ever made, I'd say.

The US economy will remain in recession for most if not all of 2009. However, Japanese-style deflation will not set in, and the CPI will be positive by the end of the year. Oil prices will rebound, but only modestly. The stock market will bounce around its recent low levels and end little changed from the beginning of the year. Likewise, housing prices will stabilize. Interest rates will fall on risky assets and rise on risk-free ones, as depression-panic subsides. Unemployment will continue to rise.

Missed the stock market rebound, but again, otherwise pretty much on target.

Environmentalism will "jump the shark" this year, as the cost of being green in a lousy economy turns off enough otherwise sympathetic folks to make the movement's excesses a target of mainstream ridicule.

Another spectacularly prescient call. Some will blame this or this, but we know the real story...


And now for this year's prognostications...

• The US economy will grow only modestly in 2010, and unemployment will remain high. Consequently, the stock market will end the year down slightly. The Fed will continue its highly expansionary (short-term) interest rate policy, but the combination of easy money and profligate government spending will spur fear of possible inflation risks down the road, forcing up longer-term rates and thus impeding economic growth. On the other hand, the US dollar will recover somewhat, and gold and other commodities will fall in tandem, as Europe and Japan continue to suffer from an even worse case of America's economic malaise. This will help dampen short-term inflation. Real Estate will, after a brief pause, continue its decline.


• The Iranian regime will not fall in 2010. In fact, it will begin a massive crackdown not only on oppostion leaders and groups, but also (as previously predicted) on insufficiently hardline elements among the government and clerical elite itself. As the repression gradually succeeds in quelling mass protests, Western attention to internal events there will subside.


• In Iran's vicinity, conditions will continue to deteriorate slowly (with the Iranian regime's help, of course). The already-unpopular war in Afghanistan will grind on without anything like the dramatic progress achieved in Iraq in 2008. Pakistan will continue to totter on the edge of collapse, without actually collapsing. And sectarian violence in Iraq will increase, although again not enough to jeopardize the government. Elections there will proceed more or less normally, with the usual chaotic, not-entirely-conclusive results.


• The Israeli government will fairly soon make a deal with Hamas to free hundreds of Hamas terrorists in exchange for the return of captured Israeli soldier Gilad Schalit. The deal will powerfully energize terrorist groups in the West Bank, who will respond with a surge of terrorist violence and disturbingly effective subversion of the new American-trained Palestinian Authority security forces. However, Israel will step in firmly to fill the gap left by the suddenly floundering locals, and will harshly suppress the violence. This show of resolve by the Israeli government will dampen the usual global hysterics--American and European official condemnations being predicated largely on Israel's past meekness in the face of international bombast--and American and European relations with Israel will actually strengthen in the aftermath.


• The Obama administration will hobble through 2010 weakened and flailing. Health care legislation, if it passes at all, will be watered down still further from the already-perfunctory Senate version, after the bill's big losers (Medicare beneficiaries, "Cadillac plan" customers, and most doctors) band together and start exerting serious political pressure. The administration will turn its attention to the economy, but sluggish growth and stubbornly high unemployment will nevertheless persist throughout the year (see above). The president's foreign policy will appear similarly feckless, with the already-unpopular Afghan campaign dragging on inconclusively, the "engage America's enemies" strategy garnering nothing but contempt from the likes of Iran, and the Middle East conflict (unsurprisingly) continuing to resist resolution despite the administration's best efforts. The administration will also make major personnel changes to his inner circle at some point during the year, replacing one or more key advisors with establishment figures intended to add gravitas and centrist appeal. Needless to say, the shuffle will accomplish little.


• Exploiting the economy's weakness and the administration's poor approval ratings, the Republicans will launch a grand policy platform akin to the "Contract with America" that led to huge GOP electoral gains in 1994. Like the previous one, the new program will consist of broad, vague, impractical proposals that poll well but stand no chance of being implemented. Armed with this putative platform and buoyed by populist conservative outrage and disappointment-bred apathy among the liberal base, the Republicans will make large gains in both houses of Congress. They will, however, fail to take control of either one.


• There will be a cultural backlash against recession-driven frugal-mindedness, and stories about straitened times for the once-profligate will give way to 30s-style otherworldly depictions of ostentatious wealth and glamor.