US power peaked in the late 1940s, when it had half the wealth of the world and unmatched control over international institutions, trade, etc. It’s been declining ever since.
By 1970, the world was becoming “tripolar,” with three major economic centers: North America, Europe, Japan-based Asia. The US by then had about 25% of world wealth and production (figures from memory; I don’t recall the exact numbers). Since then the tripolarization of the world has increased. Northeast Asia is now the most dynamic part of the world economy, and also holds about half of global financial reserves — though these figures merit much closer analysis, since they treat the regions as distinct, whereas in fact there is a great deal of interpenetration.
A few years ago the former head of Clinton’s Council of Foreign Advisors, Laura Tyson, summed up the world economy in four words:
“America spends, Asia lends.” Not entirely false. And analysts generally expect that sooner or later Asia may not be so willing to lend. As the dollar declines, in part as a result of Bush economic programs, the willingness to hold dollar reserves is likely to decline
— though there are conflicting factors, like China’s wanting to preserve the US market, the fact that the US remains a remarkably rich country with extraordinary advantages, and a lot more. And there might even be a very serious international economic crash — no one knows whether existing institutions can keep things together.
I doubt very much, though, that invading Iraq was a “last gasp.” More likely, in my opinion, a matter of playing one’s strong card. The one dimension in which the US really does reign supreme, without any close challenger, is means of violence and intimidation. And Iraq is a very valuable prize.