How to win the war on terror? Stop making enemies. It sounds trite and simplistic, but bear with me for a moment. Can you think of any base of terrorism that we didn't first seriously alienate? If you can, go find a better history book (or Any history book).
This nation was founded (and even though I'm writing on Thanksgiving, I don't mean the "pilgrims") by a group of people who were tired of living in an exploited colony. The manifestation of revolution to overthrow hegemony and tyranny were ideas who's time had come--France experienced a similar set of events just a few years later. Hegel would have said that this was an idea with a life of its own, and that it was now manifesting through the life of men (in fact, he did say that). He would likely have something similar to say about terrorism.
How is it, then, that this nation founded on the ideal of freedom from tyranny and colonial control has become the greatest transgressor of that ideal? Can we not see the parallels between our forefathers' relationship with England and the "developing" world's relationship with the US today? Until Iraq, it was easy to deffend our actions as those of the free market--we didn't practice overt imperialism. But this ignores that we (with some of Europe) consciously shifted to financial imperialism at the Bretton-Woods accord. Now add "intellectual property", GMO grain and global media and the US is in fact far more of a colonial power (and more oppressive) than Britain was to the American Colonies. Is it any surprise that our colonies are rising up in revolt?
My suggestion, then, is that as a nation we again embody this principle of anti-colonialism in our foreign policy. Treat the world as equals, enter into agreements that are mutually beneficial, not exploitative (see my commentary on The World System). As a hegemonic power, we are perhaps the only nation in the world capable of affecting that change, and the only way to start is with personal example:
1. Unilaterally dispose of all nuclear, chemical and biological weapons, as well as the facilities for making them. Don't wait for others to disarm: we know now that a one sided strike by Russia or China against a disarmed US would still kill the entire world. Nuclear and biological war are not viable options for any party. It's pretty difficult to tell other nations to disarm when we're sitting on the world's largest arsenal.
2. Stop the subsidized loan programs to foreign nations. If a nation has the economic footing to get a development loan from a commercial bank, then they must have good prospects of paying it off. Why then do they need the IMF or World Bank? The answer: to fund projects that, while not good investments, benefit the nations that decide who gets what loan (read "The West"). A slower, grass-roots brand of development will produce a more stable economy, and won't crush indigenous people, cultures, environment, etc. While we'r at it, forgive all foreign debt incurred as a part of these programs.
3. Stop the subsidized sale of military equiment to select national "partners". This ends up being primarily a giveaway (Keynsian stimulus) to US defense contractors, but it also is one of America's primary means of influence in foreign affairs--particularly in maintaining regimes (like Saddam and Sukarno) who did not and could not have risen to power via democratic means.
4. Unilaterally permit free-trade, provided that any producer nation (and all derivative production nations) meets all domestic US standards for environment, human rights, labor laws, etc. This will stop oursourcing our dirty laundry and provide positive pressures on foreign regimes.
5. Restructure the United Nations from an elite club with balcony seating for "lesser" nations (with permanent security council members holding veto power). If the UN is to be a vehicle for cooperation and mutually beneficial action, then it must be a tool of all members. Eliminate the security council entirely (to include the veto power of permanent members), and give each member 1 vote, with a 2/3 majority needed to pass any action. Few truly mutually beneficial actions would have difficulty meeting that threshold, while it would prevent most tyranny of the majority.
6. Stop subsidizing the defense of the oil supply system, and strive seriously for energy independence. The quest for cheap energy at all corners of the globe is the prime mover of current foreign policy (and of making new enemies, as well as keeping old ones). Take the long-term view, remove temptation, end the catalyst of colonialism.
That's just a start, but there's no better way to diffuse the terrorists (without directly giving in to them and validating their methods) than to demonstrate that we are serious about shifting to a mutally beneficial paradigm. We'll stop making new enemies, and take the wind out of the sails of our current enemies.
Demonstrated that we intend to shift from world-hierarchy to world-rhizome. It is not just the most sustainable, independent pattern for humanity in small locales--it is the best pattern for global civilization as well.