The world has grown much more peaceful over the past 15 years -- except for oil-rich countries. Oil wealth often wreaks havoc on a country's economy and politics, helps fund insurgents, and aggravates ethnic grievances. And with oil ever more in demand, the problems it spawns are likely to spread further.

Despite some eerie parallels between the position of the United States today and that of the British Empire a century ago, there are key differences. Britain's decline was driven by bad economics. The United States, in contrast, has the strength and dynamism to continue shaping the world -- but only if it can overcome its political dysfunction and reorient U.S. policy for a world defined by the rise of other powers.

The Bush administration's new strategy in Iraq has helped reduce violence. But the surge is not linked to any sustainable plan for building a viable Iraqi state and may even have made such an outcome less likely -- by stoking the revanchist fantasies of Sunni tribes and pitting them against the central government. The recent short-term gains have thus come at the expense of the long-term goal of a stable, unitary Iraq.