For eight years, George W Bush hurt my country deeply. He pushed every button to the extreme, in every which way, and heightened the madness that's possible in this country. He heightened the violence and he heightened the greed.

Then came last week and with it hope, elation and great joy. Barack Obama's election was not a landslide, that was clear. He did not carry a lot of the rural areas, and that's going to remain an issue. But it is the beginning of a beginning. What we are hearing is a wonderful message, both to ourselves and the world, that America is capable of change.

Bush was, I believe, the grandson of Richard Nixon in many ways. Now I genuinely hope that Obama can be the heir to John F Kennedy, who was a great spirit and to whom very strong goodwill was granted. I felt that in 1960 and I feel it now with Obama. The majority is rooting for him. He's good-looking. He has a beautiful family and people wish him well. He has that youth and that outsider feel, that leanness of mind and spirit. As with Kennedy, he carries the refreshing spirit of human freedom.

The issue of colour only goes so far. I have the optimist's world view of America as a tolerant place, where anyone can grow up to be the President. It's an amazing mythology and remains the central reason why people want to come here. Of course we have far from lived up to that ideal. I grew up in New York City, where benign racism was harder to spot than in other parts of America.

When I went into the US army in Vietnam I noticed it on another level completely because there was such a divided culture between black and white, and I got into that heavily, having dealt with it, to some degree, in my films Platoon and Born on the Fourth of July

That division between race, gender and culture empowered Nixon in the long run. He achieved office on a platform of 'law and order', emphasising the polarities and splitting the country. Bush followed this path of splitting the country again. He used the terrorist attacks of 9/11 to create a pre-emptive war state, that divided and recreated the fear, appointing himself as the provider of hope. It was the classic Nixon approach: spread fear and then give them hope and then get elected again, and then spread more fear, and then give them more hope. This is a form of tyranny - the tyranny of fear.

They call it many things, but in Nixon's case it was law and order, whereas in Bush's case it was called the 'war on terror', which is such a dangerous terminology. Even as late as Thursday, he was outrageous enough to describe this transition as the first wartime presidency transition, warning us against any kind of softening attitude towards his view of the 'war on terror'. It will go down in history as a great con trick, one of those distortions like the Crusades. 'War on terror': it sounds like a religious term. It angers me that we still live in a war state.

With luck, Obama can be the antidote. His legs may be skinny, as Arnold Schwarzenegger said, but I think his will is strong. He's got lean, 'basketball' strength. I met him twice and was highly impressed with him. His biggest problem is going to be the huge amount of pressure from establishment forces that will seek to push him into corners, into gridlock. To resist those pressures will take tremendous will and purpose.

But he's shown goodwill and vision and stick-to-it-ness in his thinking. He's as good as it gets in the American mould. He's a smart cat and I think that he can handle it.

Thanks to the likes of Nixon and Bush we've spent a lot of money on war, on creating war, on feeding it, on living off the concept of security, and it's undermined the concept of what America stands for. Whenever the agenda gets set in this country, it's based on security, war and money. Like the Romans had many gods, we worship three -a god of violence, a god of greed and some sort of a Judeo-Christian god of indeterminate vengeance, great authority and spiritual determinism.

Take your pick. We are spending close to a trillion dollars on our Pentagon budget. You spend a trillion dollars on that, but spend so little on the things that matter to the people who live in that national security state that all priorities go out of whack - you don't take care of your own family.

Why can't this new President decide the agenda? Could he determine that maybe he would like to make healthcare reform or welfare or education his first priority? For Obama it would be very difficult to say, as a first point in his agenda, let's cut 25 per cent of the defence budget. If he insisted on reinvesting money in that way, it would shock the world; there would be such resistance to it. Special interests, lobbyists, corporate interests are so strong in this country; they haven't gone away. There's a hard-line security party in opposition, led by McCain and Bush, that's a frightening and daunting machine for Obama to go up against.

As I put in my film W, we have bases in 120 countries. Despite our democratic intentions, we are a military empire. We don't call ourselves that, but we function as that. We have this enormous support structure of men and women overseas. It's a form of national employment, but it's a profoundly mendacious, dangerous, costly worldwide position to maintain, so similar to Winston Churchill's impossible dream during the Second World War of preserving the British Empire. Obama will have to decide: do we continue this debacle of empire?

There is no doubt the job is enormous. It's equivalent to what Franklin D Roosevelt faced in 1932. There's that sense of a huge change in America. And I think the expectations are so high of him they become dangerous because they can lead our egos to the edge of disaster.

The mood this weekend is similar to the dawn of Kennedy's Camelot. But perhaps it is more accurate to say that Obama has the potential to be a Roosevelt. I don't know that he can change things radically, but he can start to move things in another direction.

He has talked about serious alternative energy research, climate control, co-operating with our allies, racial tolerance and diversity, education, reassessing security, changing the concept of the war on terror into something more manageable and real. He can do so much. Just changing the angle of perception a little bit in another direction, and educating a younger generation to think in a more humble way about our empire and its real goals, is an epochal choice still available to us.

• Oliver Stone's film W is on general release.