In principle, sure. But as a dominant world power, what the US does has impact on other countries whether we intend it or not.
This is just naive. Panama was not effectively sovereign for most of its history; as I said, it was a virtual US protectorate. How far back do you want “allowing Panama to run its own affairs” to go? If we had never intervened in Panama then it would still be part of Colombia. The country was in large part a creation of the US, and we ran a significant part of it, adjacent to its two largest cities, as a de facto colony for 75 years.
Here’s some background on Panama’s history:
1903: The US uses gunboat diplomacy to support Panama’s separation from Colombia, because it was able to extort better terms from the new country than it could from Colombia. The US obtains the right to intervene in Panama’s affairs in order to protect the canal. Basically nothing happens in the Panamanian government without at least tacit approval from the US.
1940: Arnulfo Arias is elected for the first time. He is a populist but also a literal fascist, and an open admirer or Hitler. Under US pressure, which obviously didn’t want a Nazi sympathizer in charge adjacent to the canal, he was ousted in a coup in 1941. He becomes president again in 1948 but is again deposed.
1964: Riots break out in Panama, originally triggered by a scuffle over flying the Panamanian flag in the Canal Zone. Twenty-one Panamanians and four US soldiers are killed. The conflict prompts the US to consider renegotiating the Panama Canal treaties.
1968: Arnulfo Arias is elected again but deposed in another military coup after only a few days. Omar Torrijos eventually takes charge of the junta.
1979: The Carter-Torrijos Treaties take effect. The US returns the Canal Zone to Panama and agrees to turn over the Canal and vacate all military bases by the end of 1999. The US begins to cultivate Torrijos’ National Guard, now known as the Panama Defense Forces (PDF) to protect the canal as a proxy once the US leaves. Torrijos founds the Partida Revolutionaria Democratica (PRD) to consolidate his revolution. Several figurehead presidents were appointed to provide a front for the military.
1981: Torrijos is killed in a plane crash and eventually succeeded as head of the PDF by Noriega. Noriega is later rumored to have had a bomb planted in the plane.
1984: In the first election since the military coup in 1068, Arnulfo Arias runs again for president and is widely regarded as having won in a landslide. However, massive fraud gives a narrow election victory to Noriega’s candidate Nicholas Barletta, a former student and protege of US Secretary of State George Schulz. The US quickly endorses the fraudulent results.
Noriega received training by the US at the School of the Americas in Panama, and at Ft. Bragg in the US. He worked for the CIA for several decades. The US was well aware of his involvement with drug dealing and other forms of corruption, but chose to ignore it as long as Noriega served our interests.
The basic error of the US was in not doing more to support actual democracy in Panama. Instead we helped create a military dictator that eventually turned on us. Saying we should have just let him be ignores the history of the situation.