1. That's Oil, Folks!

One of the biggest stories of the year was how the slippery slope that is oil went uphill. Very steeply.

At the close of 2003, the price of NYMEX light sweet crude was $32.52 a barrel. But less than 10 months later, the price had bubbled up to $55.67 -- a shocking 71% rise. By December's end, oil's price had retreated about $10, but it was still up 40% for the year.

What to blame? The red-hot Chinese economy, for one, with an insatiable thirst for power. Shadowy, sinister speculators were rumored to be at work. In the wake of the

Royal Dutch

( RD)/

Shell

(SC) - Get Report

scandal surrounding inflated reserves, traders worried about supply as well, thanks to unrest in Iraq and Nigeria and bottlenecks elsewhere on the globe.

The effects were as manifold as the causes. Airlines, already reeling from labor costs, had to contend with higher fuel bills as well. Gasoline prices, theorized analysts, ate up money that consumers would otherwise be spending at

Wal-Mart

(WMT) - Get Report

. But sales of sport utility vehicles didn't suffer; Americans aren't quite ready to break that gas-ly habit.

2. Meet the Prez

Read my lips: No new taxes. It's the economy, stupid. Are you better off today than you were four years ago?

This year's presidential election, alas, gave rise to no economic catchphrase as memorable as these one-liners from the past.

Yet George Bush's defeat of John Kerry is a pivotal moment for the economy nonetheless. By giving Bush four more years in office, the electorate has paved the way for federal economic policy likely to be far different from what it would be under a Democratic administration.

At the top of the agenda is Bush's attempt to remake Social Security as we know it -- to replace part of the New Deal-incubated financial fallback for the elderly with personal savings accounts. That makeover promises to dominate at least the first few months of Bush's second term, though approval of the change is far from certain.

Faced with a falling dollar and increasing concerns about America's national debt, Bush will also have to figure out a way to ease the world's concerns about budget deficits he helped create with tax cuts and the war in Iraq.

For now, however, Bush appears to be enjoying a second honeymoon. With what Wall Street sees as a big business-friendly administration firmly in place, the

Dow

is up 7.8% in a postelection rally, and the floodgates have opened up for a round of major mergers:

Oracle

(ORCL) - Get Report

&

PeopleSoft

(PSFT)

,

Sprint

( FON) &

Nextel

( NXTL) and

Johnson & Johnson

(JNJ) - Get Report

&

Guidant

( GDT), for starters.

3. Vioxx Don't We Do It in the Road?

Forget about cheap drug imports from Canada. The biggest story in the pharmaceutical business this year was Vioxx. Once upon a time, Vioxx was a wonder-drug painkiller that was a franchise player for

Merck

(MRK) - Get Report

. But after Merck withdrew the drug Sept. 30, based on data clearly linking Vioxx to an increased risk of heart attack and stroke, well, Vioxx was a drug that took a $26 billion bite out of Merck's market capitalization in a single day.

As the year closes out, Vioxx has taken on greater significance. It's one of a whole class of drugs -- Cox-2 inhibitors -- developed in the belief they would be safer than earlier painkillers blamed for bleeding ulcers. Turns out, however, that these Cox-2 inhibitors, such as

Pfizer's

(PFE) - Get Report

Celebrex and Bextra, have apparently replaced one set of possible adverse side effects for another.

Furthermore, the Vioxx affair has called into question Big Pharma's practice of developing relatively few blockbuster drugs, then selling the heck out of them. And Vioxx has inspired new doubt about the Food and Drug Administration's ability to assure that only safe and effective medicines reach the market. The prescription for all these newly diagnosed ills remains yet unknown.

4. Martha, Martha, Martha

Was Martha Stewart unfairly convicted? Did the severity of her punishment far outweigh the severity of her crime? Are there far more dangerous corporate criminals on the street?

The answer to each of those questions could very well be yes. But it doesn't matter.

The important thing is that, out of all the recent high-profile cases alleging misconduct by corporate executives and Wall Street bankers, the founder of

Martha Stewart Living Omnimedia

(MSO)

is the first one to serve hard time. (Well, almost; Lea Fastow, wife of former

Enron

CFO Andy Fastow, reported to prison in July. But with Mrs. Fastow clearly targeted to pressure her husband's cooperation with the feds -- and punished in a plea bargain for a single signature on a tax return -- we regard her as a small fry, not a big fish.)

Yes,

Adelphia

founder John Rigas and

Credit Suisse First Boston

banker Frank Quattrone are still free men. Onetime

WorldCom

chief Bernie Ebbers hasn't even come to trial yet. For now, Martha is the lone prison inmate who can capture the nation's attention and make sure executives are Scared Straight.

5. And Behold, It Was Google

We suspected that the Internet wasn't dead. And this year,

Google

(GOOG) - Get Report

proved it.

First, Google demonstrated that in the wake of the turn-of-the-century dot-com bust, there was still plenty of opportunity to mint a fortune from the Internet. When, after years of coy silence, the search-engine company finally unveiled its finances, the world learned that Google mania had a rational basis. Back in 2000, the company had $19 million in sales; by 2004, gross revenue amounted to $1.4 billion for the first half alone.

But it wasn't just going public -- in several ways -- that made Google one of the biggest stories of the year. What also was important was

how

Google went public.

Though Google Founders Sergey Brin and Larry Page may avoid the limelight, Google's management wasn't shy about getting its way in the initial public offering of Google's stock. Brin and Page held on tight to control of the company with two classes of stock. They dictated an unconventional auction format for the IPO and took other measures to democratize the IPO. And though Wall Street grumbled about getting pushed around by another set of dot-com punks -- well, as the stock price zoomed post-IPO, they couldn't argue with success.