There is a new Israeli prime minister and the U.S. government is virtually bankrupt: Many people across the Middle East are happy at both developments for very understandable reasons, but we should be careful about what we wish for. And we need to understand how the two developments affect each other.

There is no doubt that if there are any prospects whatsoever for reviving the moribund, dead-on-arrival Annapolis peace process, Tzipi Livni, the new leader of Israel's ruling Kadima Party, is the best of all available choices to do so.

Binyamin Netanyahu, leader of the right-wing Likud Party, which has been ahead in the polls, hates the idea of any renewed peace process with the Palestinian Authority like poison. Ehud Barak, the defense minister and leader of the opposition Labor Party, on paper is almost as ready to make necessary concessions to revive the peace process as Livni. But one never knows at what target he is going to launch his air force next. Both Barak and Netanyahu are certainly far more likely to gamble on ordering a pre-emptive Israeli air strike against Iran's nuclear facilities than Livni would.

A recent poll shows Livni unexpectedly neck-and-neck with Netanyahu at 28 percent popular support, with Barak and his Labor Party imploding down to 12 percent. This figure was presumably a reflection of Livni's meteoric rise in celebrity. Even her hapless predecessor, Prime Minister Ehud Olmert, enjoyed a six month popular honeymoon before crashing into his unnecessary 2006 mini-war in southern Lebanon against Hezbollah. Lvini should therefore enjoy at least a brief window of opportunity to try and play herself in, and revive whatever is left of centrist political ground in her country.

However, the odds are against her. The economic tidal waves from the growing American economic catastrophe are already starting to wash against our region. It remains to be seen if global oil prices will crash following the unprecedented financial crisis afflicting the United States. Certainly, all the cheap talk we have heard from liberal Democrats in Washington about financing "a new Marshall Plan" to boost living standard across the region can now be dismissed as irrelevant historical fantasizing. The United States could not have afforded such a policy as long as George W. Bush was in office firing military thunderbolts left and right and exulting in his video game fantasy of being commander-in-chief. Now whoever succeeds

Bush will have to quietly focus on cleaning up the awful economic mess he left behind him.

It may well even be that the days of the dollar as the world's leading petrocurrency are now done. We may hope that the euro may fill the bill and the economic clout of Russia and China is, realistically, bound to wax stronger in the Middle East at Uncle Sam's expense.

Both Lvini and Bush's eventual successor in Washington had better start now preparing for this radically changed new world. The Americans will loathe it, of course. But they have no one to blame but themselves.