In 2001, the first year of the new millennium, I wrote in this column that America - and possibly the world - could be entering a new Golden Age, "if we can keep it" - to paraphrase Benjamin Franklin. But I tempered my enthusiasm, cautioning that innovation, entrepreneurship and economic advancement should not be taken for granted, and the ability of policymakers to throw a wrench into the proceedings with monetary policy mistakes, excessive taxes, tariffs and regulatory overkill should never be underestimated. We began the first term of the Bush administration with the hope of the next technological wave, tempered by the reality of monetary deflation, the "dot-com bomb" and an economy in recession here, much of Europe and Japan.

Then, on 9/11, jihadist terrorists turned jet planes into suicide missiles striking the Twin Towers in New York and the Pentagon in Virginia. Sept. 11 was the defining event of the year and President Bush's first term in office. By the end of 2001 the nation was at war. Thanks to the leadership of the administration and the superb military leadership by Gen. Tommy Franks, we destroyed the Taliban and freed the 29 million people of Afghanistan, which had been turned into a breeding ground for jihadists and terrorism.

Much of the news of 2002 focused on the economy, crippled by an inherited recession, 9/11 and corporate accounting scandals, most notably at Enron and WorldCom. Thus, in the summer of 2002, with little debate and even less deliberation, Congress passed and the president signed into law the most sweeping new regulatory changes in American securities law since the Great Depression. By the end of 2002, the debate had shifted to the doctrine of pre-emptive war, and the war on terror turned its gaze toward Saddam Hussein. A six-month-long debate ensued.

As 2003 began, war in Iraq seemed inevitable. Bush announced in the State of the Union that the "dictator in Iraq is not disarming. To the contrary, he is deceiving." By March 17, we were on the precipice of war in Iraq as the president drew a final line in the sand. He said, "All the decades of deceit and cruelty have now reached an end. Saddam Hussein and his sons must leave Iraq within 48 hours. Their refusal to do so will result in military conflict, commenced at a time of our choosing. For their own safety, all foreign nationals - including journalists and inspectors - should leave Iraq immediately." While I had expressed concerns about occupying a Muslim country, I ultimately relied on the wisdom and leadership entrusted to this administration.

On March 20, 2003, "shock and awe" rocked the heart of Baghdad as U.S. forces began the aerial assault on Iraq. In just three short weeks Baghdad fell, but though we may have won the war, there would be many more battles ahead if we wished to secure the peace.

Meanwhile, in Washington, the president managed to get through his 2003 tax cuts, which accelerate the tax-rate reductions from the 2001 tax bill, cut dividend and capital gains tax rates, and accelerated depreciation for business investments in plant, equipment and technology kick-starting an economic recovery that continues to this day. The year ended with the capture of Saddam Hussein in a rat hole and without a fight.

This year was dominated by the presidential campaign within the larger context of the ongoing insurgency in Iraq, the release of new videotape by Osama bin Laden just before the election and the first democratic election in the 5,000-year history of Afghanistan. The year began with a Democratic Party pushing a left-wing, protectionist, anti-war agenda and advocating higher taxes, but only for the top 2 percent.

Nonetheless, the national party conventions and the general election were decisively about the war in Iraq and who was better suited to be commander-in-chief. Kerry wrongly wagered in his presidential campaign that the undecideds would break disproportionately to the challenger, and Bush correctly focused on increasing his base turnout. On Nov. 3, 2004, a clear majority of Americans gave George W. Bush an election victory and a mandate for four more years and his progressive conservative agenda of an ownership society.

Today, the insurgency in Iraq is far from vanquished, the economy is hitting on all cylinders - the Dow reached its highest level in 3 1/2 years and seems poised to reach all-time highs within the next year. The next four years portend more momentous events. The climate may now be right for reform and liberalization in the Middle East and the Muslim world, particularly if accompanied by a cooperative approach to a Marshall aid plan designed for the 21st century. On the domestic front, the president is already beginning to make the case for reforming Social Security for the 21st century.

As we begin the next four years I still think that we are entering a Golden Age, but the technology that promises so much for our health, knowledge and prosperity in the wrong hands may be used to unleash untold horrors. Just as when the first term of George W. Bush began, I caution that we must remain vigilant lest we backslide on our recent successes in the war against terrorism and restoring economic vitality. Progress is the natural offspring of mankind's ingenuity, determination and perseverance, which freedom and democracy allow to flourish. But progress should never be taken for granted while freedom and democracy remain at risk.