Certainly, 2011 did not lack for big news stories -- some of them were even big enough to draw attention away from the Kardashians and the NFL and NBA lockouts. What's more, some of the major events of 2011 will help determine the course of the economy in 2012.
Here are four examples of 2011 headlines that will have significant implications for 2012's economy:
1. The 'Arab Spring' topples long-entrenched dictators
First Tunisia, then Egypt and, eventually, Libya. Now Syria's dictator is under pressure. Across the Middle East, popular revolutions brought an end to dictatorships that many of the citizens of those nations had lived with their entire lives.
How will this play out in 2012? The optimistic view is that the flowering of democracy will help isolate (and therefore neutralize) Iran. The pessimistic view is that Islamists will win control over those nations, further radicalizing the region. The result could impact whether oil prices remain reasonably stable, or spike up as tensions rise. With inflation already overwhelming CD, money market and savings account rates, the last thing depositors need is higher energy prices.
2. Democrats and Republicans put politics before progress
Partisan battles are nothing new, but instead of saving the acrimony for key issues, the current version of Congress seems to have made the stalemate their default position. The optimistic view is that inaction will help rein in government spending. The pessimistic view is that in an election year, both sides will favor spending over fiscal discipline, and the deficit will get further out of hand.
3. European debt woes threaten the euro
The European debt crisis carries threats on two levels. One is that austerity measures will cripple the European economy, and thus stunt demand in an important/export market for the U.S. The second threat is that massive debt defaults could bring down major banks around the world. The optimistic view is that the long-developing nature of this crisis has allowed banks to ramp down their exposure to troubled debt in an orderly manner. The pessimistic view is that the promise of a bailout from the European Union has encouraged financial institutions to speculate in that debt even further.
4. U.S. unemployment drops below 9 percent
This shouldn't be anything to brag about, but with unemployment having been above 9 percent for most of the past two-and-a-half years, it was progress when unemployment dropped to 8.6 percent in November. The optimistic view is that this gives the economy some sustainable momentum. The pessimistic view is that the last time unemployment dropped below 9 percent, in early 2011, it proved to be a false start.
What the stories above have in common is that while all of them made a substantial immediate impression, they will also likely have far-reaching effects that could be even more significant. And if 2011 is any indication, it would be wise to expect a steady flow of events like these in 2012 as well.