"There is nothing wrong with change if it is in the right direction," Winston Churchill observed. But of course it isn't always in the right direction, as events of the past year have shown. Significant 2003 public policy changes are taking us in new directions, both right and wrong.

The first was the pre-emptive war in Iraq , a battle against the organized terrorism that is a real danger to the United States . It is in response to a holy war launched by Islamic fundamentalists against the core values of Western democracy (for an excellent analysis, see Bernard Lewis's "The Crisis of Islam"). Osama bin Laden demands that America end freedom for women, the separation of church and state, and our "oppression, lies, immorality and debauchery," and that we embrace Islam. Old France thinks pre-emptive military efforts are inappropriate, so America is fighting the battle for Western civilization's common values. The military war in March was a quick and overwhelming success; notwithstanding Saddam's capture, the daily struggle against Islamic fundamentalism will be long and frustrating.

The second substantial change is the tax reductions that have fueled the strong economic growth that is lifting the country out of its three-year doldrums. In the third quarter the economy grew at an annual rate of 8.2%, the best since 1983. The Dow Jones Industrial Average is up 20%, productivity in nonfarm businesses is up 9.3% in the third quarter, and nonfarm employment is up 328,000 since July. The Bush administration has changed our economic policies and they are working to expand our opportunities.

The Medicare bill's Health Savings Accounts--IRAs for health care--that will become available next month to everyone under 65 are an excellent idea that will put more health-care dollars and decisions in the hands of families instead of the federal government. Unfortunately the rest of the Medicare bill will be an expensive expansion.

The partial-birth abortion ban (there is nothing "so-called" about the procedure) signed by the president in November is the first positive and substantive change in abortion law since Roe v. Wade 30 years ago.

The Republican Party has changed too, for the worse; it is becoming the party of big government. With the GOP in full control of the White House and both houses of Congress for the first time since 1953, nondefense discretionary spending was up an average of 9.3% in President Bush's first two years and 8.5% the fiscal year just ended. And that's before the $400 billion (think $2 trillion to $3 trillion) Medicare bill signed last week and the profligate $80 billion energy bill Mr. Bush will sign in the spring.

Both Republicans and Democrats now embrace protectionism. Mr. Bush imposed tariffs on Canadian lumber, and on imported steel --which saved 5,000 jobs in the steel production industry and cost 26,000 in steel consuming industries before they were repealed--and now on Chinese lingerie (Chinese bras are threatening America ?). The Democratic Party has virtually abandoned free trade: other than Joe Lieberman, its presidential candidates are opposed to Nafta-type trade agreements. Free trade has been U.S. policy for generations, but the fundamental concept that people should be free to buy the goods they want from the supplier they choose is eroding.

And last week a wrongheaded U.S. Supreme Court decision upheld the McCain-Feingold campaign spending regulations and eroded the First Amendment's free speech clause. Federal courts and the FEC can now intervene in federal election campaigns, deciding what ads may and may not be run. And the decision invites Congress to continue its meddling.

But the most significant change in the nation's policies and politics is the emerging divide between the FDR liberalism of older Americans and the individual-choice beliefs of the Internet generation. As I discussed in last month's column , it is a tension between the standardization and centralization of the first two-thirds of the 20th century and the decentralized individualism of what Michael Barone calls "postindustrial, information age America ."

One of the fundamental (and irreversible) forces driving this change has been a massive information shift, driven first by the growing success of talk radio and cable television--Rush Limbaugh's 20 million listeners and Fox News's 51% of cable news primetime viewers, for example--and then by the emergence of the Internet medium. Both appeal to younger generations by offering very different and far more diverse perspectives than those of traditional media--NPR, CNN and network television, the New York Times and so forth.

The Internet has become a primary source of information and action. Much of Howard Dean's presidential campaign is the Internet; without it he would long ago have been buried by the establishment press as an inappropriate candidate; with it he communicates around and over the talking heads of the media moguls.

That has led to the year's primary political change: a significant shift in the Democratic Party. It has moved left and it has moved angry, shifts that are seriously out of synch with information age Americans. Howard Dean gets an A-plus for his insurgent presidential campaign, an F for his statist economic (raise taxes on all taxpayers) and business (break up media companies) policies, and a B or a D--depending on your political outlook--for what he is about to do to the Democratic Party. With the endorsement of Al Gore, Mr. Dean has become the favorite to win his party's nomination. But after a devastating loss to Mr. Bush--including Republican gains in the House and Senate--the Democratic Party will be a shambles. A new and different Democratic Party may then emerge--less angry, less left, less uncompromising--which will seriously challenge big-government Republicanism in the 2008 elections.

And a final sad change came last weekend with the death of five-term Delaware senator Bill Roth. An author of the Roth-Kemp tax cut legislation that became the Reagan tax cuts, the creator of the Roth IRA, the revealer of the Pentagon's $9,600 wrenches and $640 toilet seats, and the instigator of marvelous hearings that publicized the ineptitude of the Internal Revenue Service, Bill was a pro-growth economic conservative and perhaps the best friend taxpayers ever had in the Senate.

Two good books on significant historical events might be on your Christmas list. Martin Amis's "Koba the Dread: Laughter and the Twenty Million" is "a memoir, a history, and a meditation on Stalin and his legacy," a fresh perspective on terrorist rule in the Soviet Union--famine, gulags, denunciations, killings--and the rationalization of it all at home and in the West. Mr. Amis's father, British novelist Sir Kingsley Amis, was for a decade a Communist Party member and Stalin supporter, so some family differences are discussed as well.

James Bradley's "Flyboys" is the story of nine American airmen shot down in 1945 over Chichi Jima--the island near Iwo Jima that was Japan 's Pacific communications center. Only one, George H.W. Bush, survived, because a submarine rescued him before he could be captured. After the war the Japanese and U.S. governments concealed the stories of the eight airmen; "Flyboys" relates them and explores the Japanese culture that led to the rape of Nanking , the Death March of Bataan, kamikazes, bayoneting, beheading and even cannibalism. It begins with Commodore Perry's fleet arriving in Tokyo in 1853 (after stopping at Chichi Jima), covers Pearl Harbor , Doolittle's raid, the Pacific war, and the return of former President Bush to Chichi Jima in 2002. It is an excellent and emotional read.

Finally, the year's most delicious irony: in May the Defense Minister of Poland oh-so-nicely invited his German counterpart to contribute troops to the Polish forces helping America in Iraq . Gerhard Schroeder was furious at the idea that German troops would take orders from and even have to salute Polish-- Polish! --superiors.

So 2003 was a year of substantial change-- Baghdad and the capture of Saddam, an economic surge, ideological change, Mr. Dean and Democratic destruction. But the 2004 presidential primaries begin in just four weeks, so fasten your seatbelt.

In the meantime, have a good holiday.