I would give it to Geroge W. Bush for the job that he has done this year under the circumstances.
He took office under the specter of illegitimacy, and led this country through the most horrific incident in U.S. history. He has managed to unite the country behind him and piece together a whole global coalition in response to the 9/11 attack and the continuing global terror threat.
Osama would be an ideal candidate if Time had an Asshole of the Year issue.