A YEAR CAN be a short time in politics. Surprisingly short, if you compare the stories dominating the media and party conversations this week with those of a year ago.

Then, as now, everybody was deriding Tony Blair’s lame-duck status and wondering when Gordon Brown would replace him and whether the Tories could possibly have a chance of winning an election this decade. Then, as now, the NHS and Labour’s education policy appeared to be on the brink of an existential crisis. Then, as now, Europe was perceived to be drifting into historical oblivion. Then, as now, gallows humour about the frightening incompetence of the Bush Administration, especially in Iraq, was fashionable.

So has anything really changed in the past 12 months or could those of us in the news business have shut up shop and gone for a holiday without being missed? Despite the general election and first jihadist attack in Britain, despite the spectacular defeat of the EU constitution, despite the continuing Iraqi bloodshed and the doubling of oil prices, historians are unlikely to remember 2005 as an interesting or pivotal year. Indeed so far, the whole of this decade has been one of the least eventful on record.

This may sound perverse since conventional wisdom insists that life is moving faster than ever and that the world changed sensationally and irreversibly on September 11, 2001. But what has really happened since that awful day? Afghanistan and Iraq have been invaded and terrorists have claimed thousands of lives in Iraq, Indonesia, Palestine and other predominantly Islamic countries, but in the West there have only been two atrocities: in London and Madrid. Of course, even one atrocity is one too many, but remember that more than four years have elapsed since President Bush declared his War on Terror. And compare what has happened in the four years since 9/11 with the period that followed America’s previous declaration of war. In the four years after 1941, when the Japanese attacked Pearl Harbor, Western Europe and Asia were liberated, Hitler died in his bunker, the two most brutally efficient armies the world had ever seen were utterly defeated and the atom bomb was invented from scratch and dropped on Japan. In comparison with our parents’ generation, we surely live in a remarkably stable and safe world, in which politics, society and even technology move at an almost glacial pace.

When viewed from this historical perspective, events such as the London bombings, the Blair-Brown feud, the emergence of a new Tory leader or even the election of a third-term Labour Government can be seen in proportion. Rather than argue about whether Mr Blair is up this year and Mr Brown is down, or vice versa, or whether the Tories or the Liberal Democrats were the real losers in the election, let me focus on what I think may be the one truly historic change that has occurred in 2005.

With poetic justice, the biggest loser of 2005 has turned out to be the previous year’s most undeserving winner — Mr Bush. Largely because of the sheer astonishing incompetence of the US occupation of Iraq, confirmed by the even greater incompetence displayed after Hurricane Katrina, Mr Bush’s incomprehensible popularity and mysterious power over American voters have vanished in a puff of smoke, like the Wicked Witch of the West in The Wizard of Oz.

The unravelling of the Bush Administration, which started immediately after the President’s re-election, came as no surprise to those of us who found Mr Bush an absurdly implausible leader and were expecting open warfare to break out within the Republican Party’s strange coalition of economic liberals, social conservatives and trigger-happy militarists. This early in-fighting in Washington is not necessarily bad news for the American Right or good news for the Democrats. The various Republican factions have plenty of time to let off steam and settle on a plausible candidate by 2008. But the rapid decay of the Bush presidency has broad significance for it could inspire a profound reassessment of America’s global hegemony and its role in the world. After 9/11, and especially after the easy invasions of Afghanistan and Iraq, America has been widely believed to dominate the world because of its unchallengeable military power. But this year’s events in Iraq and Washington have shown this assessment to be simply wrong.

America’s military power, at least in the hands of Mr Bush and Donald Rumsfeld, has turned out to be, as in Vietnam, a paper tiger. Yet America is more globally dominant than ever before. The explanation of this paradox lies in America’s economic performance, which has been as spectacularly successful and as skilfully managed this year as the military operations have been bungled. The US has again had the fastest-growing advanced economy in the world. And this 20-year winning streak is bound to continue as long as Europe entrusts its economic management to institutions even more incompetent than the Pentagon under Mr Rumsfeld.

In other words, the saying that “the business of America is business” has never been more true. More than ever before it is the success of the US economy, and the associated strength of its higher education system, rather than anything to do with armed might, that assures America’s cultural dominance, even in such pathologically introverted societies as Iran, Saudi Arabia and China.

America owes its global hegemony to the “soft power” that European politicians boast about but are unable to harness, mainly because of Europe’s incompetent economic management. Meanwhile, the “hard” military power beloved of braggart neoconservatives turns out to be largely an illusion — and one that America cannot sustain on its own. This paradox is, to me, the most interesting lesson of 2005.

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