I think the problem with looking at it in a game-theory kind of way (and I started that with the Canada discussion but I think now that thinking systemically is the only way to understand it) is that there are far more than two players in the big picture - policy setting must be very complex and occasionally has got to be like pushing on a balloon.
Basically, less like Connect Four and more like Risk?
I have basically the same problem with the Administration as August, and it really became clear to me when doing a report on the Abu Ghraib prison scandal: it is clear how little the current administration cares about any other country when one considers the image foreign countries now have of America. This administration is absolutely insane about image; consider the "Mission Accomplished" banner and the flight suit. Everything is about the image.
But consider how foreign policy has been conducted. The Bush camp has never hesitated to act like every "crazy cowboy" stereotype, or hide even their most cynical priorities. Remember during the invasion, when Bush broadcast a message telling the Iraqis, first off, not to destroy oil fields? Remember when his administration awarded Halliburton a no-bid contract? Remember when, at a dinner in March, Bush made JOKES about how they couldn't find "weapons of mass destruction" in Iraq, thus destroying his major justification for the war? This stuff is usually mentioned once in the American media and then it floats to the bottom, like Jimmy Hoffa. But this stuff is noticed elsewhere. People in other countries actually give a shit what Noam Chomsky says, and they maybe had a bit of anti-Americanism in them before all of this, too.
And sure, America will naturally look after America first, but here's the rub. Globalization, for good or for bad, has erased a lot of borders, especially in regards to finance. And that means that if we piss off an entire country, they don't have to do a boycott of American products and wait until the end of the financial quarter for us to find out their pissed. They can just drop our stocks, or downgrade our currency, or, hell, refuse to sell us oil. What did that Morgan Stanley dude say? Ahh, here we go: "To finance its current account deficit with the rest of the world, he said, America has to import $2.6 billion in cash. Every working day."
If we piss people off enough, they're not going to give us that money, and then we're suddenly in "Mad Max: Beyond Thunderdome" territory. Two men enter, indeed.
I think that most other countries have lost respect for the United States because the United States did not, for a moment, consider how these countries see the United States; not just in Iraq, but with anything. If something we do pisses off a lot of Canadians, we'd better figure out a way to highlight where Wolverine is from in the next X-Men movie, or hire Mike Meyers for more films, or SOMETHING. We can't just be all, BOO TO YOU, CANADA! It makes things a lot more complex, but it sort of has to be done.