It looks like the situation in Iraq is not quite as bad as stated in this report. To some extent this is a political strategy to greatly lower the public's expectations for where Iraq will be in 2008, so that the Bush administration has some chance of exceeding expectations in its remaining two years. Outside of Baghdad and Anbar province, Iraq really isn't doing too badly. Oil production is way up over a couple of years ago and the main problem is a stubborn insurgency in Anbar province and a lot of violence in Baghdad provoked to some extent by Iran and Syria. Note that Gen. Abazaid said recently that he did not sense despair among his commanders and troops in Iraq, but he felt the despair in Washington. I wouldn't be surprised if the situation in Iraq begins to exceed public expectations sometime in the second half of next year. Meanwhile we need Iraq as a base for military and intelligence operations in Iran if and when those operations are necessary.
The MSM may get snookered here by overstating the problems in Iraq and calling it a total disaster, only to have the country stabilize next year. I will laugh if and when that happens.