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The standard conservative line on President Barack Obama's foreign policy is that he is a weak pushover. One of the usual liberal ripostes is better that the USA have a leader who tries to gain agreement among allies that a unilateralist who goes around the world picking fights.

In between these polarised views, there have been steps by the new administration that can be cited by either side in the debate. Establishing diplomatic ties with Syria, reaching out to Iran, seeking deep cuts in nuclear weapons with Russia, conciliating China, or insisting that Israel adhere to its promise under the international road map to stop building settlements in the occupied territories.

So far both sides in this argument tend to set these decisions in the context of the president's personality or political philosophy. The real weakness though in American foreign policy now derives from economics.

Whether the US had elected Obama or McCain some large scale belt tightening was inevitable in the wake of the financial crisis. The Pentagon in particular was bound to feel the pinch.

President Obama kept Robert Gates, the Bush administration's defence chief, in place and John McCain probably would have done too. The need to trim hundreds of billions out of defence spending is the most obvious symptom of America's weakness.

The US relationship with Russia has been soothed by the need to cut strategic nuclear programmes and missile defence ones - both horribly expensive. China too can read the writing on the wall, that the US no longer feels it can afford strategic competition.

As the US tries to stimulate its own economy and bail out Wall Street, the growing mountain of national debt cuts the ground from aid programmes - soft power as well as hard. The White House has characterised its policy as multi-lateralist but so far multi-polar might be a better word.

Why multi-polar? Because in these difficult economic times western democracies are very reluctant to accept American leadership, for example on Afghanistan. The scope for multi-lateralism is strictly limited.

On the other hand, big powers such as China and Russia with their UN Security Council veto, are being conciliated. As the G20 becomes more important in international economic affairs, countries like India and Brazil are also gaining in status.

In the multi-polar world, America must concede influence in order to reach an international consensus on anything from Iran, to climate change or global finance. It looks less like a multi-lateral Woodstock and more like the 19th Century world of ruthless realpolitik.

So Poland or the Czech republic - both of which had agreed to accept US missile interceptors until the programme was shelved last week - got trampled as Washington changed course to save money and conciliate Moscow. Traditional US allies like South Korea or Taiwan can expect short shrift too, as the US cedes growing regional influence to China.

The only real alternative to this multi-polar, diminished US was the path of diplomatic isolation and maintaining huge debt-funded military programmes - the Bush alternative in other words.

As last year's election emphatically showed, the American public had lost its appetite for that option. So it's easy to portray the new administration as weak, but really it simply has to accept the waning power of the US.