What kind of a legacy is George W. Bush leaving behind? He will surely be remembered for the resounding defeat his party suffered in the recent elections - in the Senate and House of Representatives, but first and foremost the great victory of Barack Obama. Obama defeated John McCain, but actually he was running against the record of President Bush and won. It is said that under the circumstances, any Democratic candidate would have won the presidential election, and Obama did it in a big way. So was Bush really one of the worst presidents in U.S. history, as the electorate's verdict in 2008 might indicate? The jury is still out, and in time, in historical perspective, it might look different.

When the primary campaign began almost two years ago, the central issue was the United States' involvement in Iraq. The Democratic candidates competed with each other in their call for the withdrawal of U.S. troops. They wanted to set a date for such a withdrawal and in Congress deny the president the funds to support a continued military presence. It certainly looked like the operation in Iraq was going nowhere and that it had been a mistake from the get-go. The Democrats said: "Better cut our losses," and most of the American public seemed to agree.

President Bush, however, refused to concede. Even more, he insisted on the "surge," increasing the number of U.S. troops, and against the advice of some his senior military advisers more troops were sent to Iraq. It worked. The casualty rate of the military and Iraqi civilians came down significantly, the Iraqi government began functioning, and Iraqi forces began taking over the battle against terrorism from the American troops. It did not take long before Iraq ceased to be a major issue in the campaign. There seemed to be little point in raising the issue when it began to look like the calls for a hasty withdrawal had been mistaken and the operation might yet end successfully.

This turn of events might have acted in favor of the Republican candidate, McCain, who had backed the operation in Iraq and supported the surge. On this issue, so important to America, maybe Bush and McCain had, after all, been right. Then along came the economic crisis, getting worse by the day and sweeping all other issues to the sidelines. The incumbent president and Republican party were blamed for it and considered incapable of dealing with it. Were they not the representatives of big business? Obama's call for "change" reverberated throughout America, and as the campaign proceeded, his victory looked more and more certain.

Today it is pretty clear what caused this, the worst economic crisis in America since the Great Depression of 1929, by now engulfing the entire world. It was the subprime housing mortgages provided and funded on a massive scale by two federal institutions, Freddie Mac and Fannie Mae, and the leveraging and hyper-leveraging of debt through new and sophisticated financial instruments like derivatives and hedge funds by investment banks. Warren Buffett, the Oracle of Omaha and no opponent of market economics, referred to them as "weapons of mass destruction" already some time before the storm hit the markets. And that they turned out to be. They succeeded in destroying wealth on a massive scale in record time.

And the guilty party? Who had the task of supervising and regulating this activity before it turned into a hurricane? That was the job of the Federal Reserve System, an independent body, responsible for monetary policy and supervising and regulating the United States' financial institutions. It is headed by the chairman of the Federal Reserve. First appointed by Ronald Reagan and reappointed by successive presidents, Democrat and Republican, the chairman of the Federal Reserve from 1987 to 2006 was Alan Greenspan, an illustrious economist of sterling reputation, considered to have infallible judgment on economic matters. He did not believe in regulating this activity.

According to Paul Krugman, who this year received the Nobel Prize for economics, Greenspan "is the person most responsible for the crisis." Greenspan himself admitted in testimony in the U.S. Congress on October 23 that he had been "partially wrong" in opposing regulation. And yet the incumbent president, George W. Bush, and the ruling Republican party inevitably took the blame for the crisis, and this had a major effect on the election results.

The economic crisis will in due time be overcome by measures taken by the present administration and Obama's administration. But what will happen in Iraq? That will determine the legacy of George W. Bush in the scales of history. If terrorism there is defeated and Iraq becomes the first Arab democracy, it will have a profound effect on the Middle East and entire world. In that case, Bush's Iraq operation will turn out to have been an event of great historic significance. That more than anything else will determine his place in history.