Let’s suppose that a subsidiary of a major U.S. corporation was in trouble, and the board of directors brought in a new CEO to shake things up and turn the subsidiary around. After more than a year had passed, the subsidiary was still bogged down, bleeding profits at an ever higher rate with each passing day, at a greater staffing level than ever, the senior leadership of the subsidiary was doing its own thing, and as a result there was no end in sight to the deterioration of the company’s slumping stock price. Would the board retain the CEO? Of course not.

Yet the Chairman of the Board of America Inc., George W. Bush, continues to stick with his CEO, General David Petraeus, who is rapidly turning into a caricature of the man that claimed earlier successes in bringing sectarian fighters together in the subsidiary, Iraq Quagmire LLC™.

Several reports over the past couple of days indicate just how poorly things are going in Iraq, and the media spinning in advance of Petraeus’ congressional testimony this coming week is palpable.

Two weeks ago, the western media was largely parroting the administration’s boast that the Iraqi Army defense of Basra was a victory over the Mahdi Army. Right wing bloggers were crowing that Moqtada al-Sadr had “sued for peace” or surrendered, when nothing could be further from the truth. Prime Minister Nouri al-Maliki had led an under equipped, poorly disciplined military excursion into the heart of the Shiite insurgency, and had his ass handed to him. It required intercession from Iran, apparently the only “honest broker” in the sectarian Iraqi conflict (al-Maliki and al-Sadr both have close relations with Iran), to stop the fighting.

The UK Times reported Sunday:

A senior Iraqi official who met Petraeus last week said, “It will be difficult to show that the situation is improving.” Another Iraqi source described the US general as “furious” that al-Maliki moved against the militias into Basra without consultation and had to rely on US forces to bail him out…

That’s not entirely correct, but one way of spinning the situation, I suppose. al-Maliki needed to call in the U.S. calvary not merely to bail him out, but to stave off a humiliating withdrawal of Iraqi forces that were defecting by the busload to the Madhi Army. And then Iran brokered the peace deal? It’s safe to say that Gen. Petraeus must have been nearly spitting nails. Frank Rich of the New York Times has gone so far as to brand the battle of Basra as a “mini-Tet” (in reference to Lyndon Johnson’s ill-fated Tet Offensive in Vietnam).

Yesterday, fighting in Baghdad was intense. Rockets and mortar fire once again pummeled the Green Zone Bar and Grille. Two U.S. soldiers were killed in the Green Zone, and many other troops were apparently wounded in the attack. (Two more soldiers were also killed around the country.) Sadr City is, for all intents and purposes, locked down and a humanitarian crisis (like there wasn’t already one) is exploding, with no water, electricity, open markets, or fuel supplies. Residents can’t leave their homes without fear of being picked off by sniper fire. Many died in clashes there today; no exact figures are being put out yet but the casualty figures are in the hundreds.

Nice cease fire there, Mr. Maliki.

Against this backdrop, the Iraqi parliament is pushing an initiative to totally disenfranchise Moqtada al-Sadr’s Shia sect as a political force in Iraq. Al-Sadr has called for a million person march in Baghdad on Wednesday. “Reconciliation?” That was supposed to be one of the Bush administration’s major benchmarks of progress, but after this action in parliament, Iraq seems further than ever from any kind of resolution to the internal conflicts:

Iraq’s major Shiite, Sunni and Kurdish parties have closed ranks to force anti-American cleric Muqtada al-Sadr to disband his Mahdi Army militia or leave politics, lawmakers and officials involved in the effort said Sunday.

Such a bold move risks a violent backlash by al-Sadr’s Shiite militia. But if it succeeds it could cause a major realignment of Iraq’s political landscape…

Let’s rewrite those last two sentences in the way that the Associate Press editor who cleared this story should have constructed them:

If it succeeds, it could cause a major realignment of Iraq’s political landscape. But such a bold move risks a violent backlash by al-Sadr’s Shiite militia.

Recent history would suggest that a violent backlash is all but assured were the proposed election bill to be passed. This news, coupled with al-Sadr’s call for a mass march this week, should be setting off alarm bells everywhere (except apparently, in Bush’s bubble). Armed with this information and the prior reports cited above, why would Petraeus even be thinking about coming back to Washington to say “all is well”?

The escalation of American forces in Iraq last year is no longer a “surge”, it’s an increase in the permanent occupation force. Even Bush himself said yesterday that there will be no further drawdown in forces, even as his military leadership team testified last week that the Army is hitting the red line.

Let’s get back to the CEO thing for a moment. By almost any measure, whatever decrease in violence had occurred in Iraq toward the end of 2007 was due to two things:

- The cease fire decleared by al-Sadr in August 2007, and
- American taxpayer’s money being funneled to arm and bribe Sunni fighters.

Both of these short-term fixes to stanch the bleeding in Iraq are apparently falling apart. CEO David Petraeus has been given more resources, at a higher cost than ever, to turn Iraq Quagmire, LLC™ around. It hasn’t worked. And the Board of Directors is simply biding their time, waiting for their golden parachutes to open in January, 2009, when they can turn the whole mess over to their successors.

With America, Inc. being driven into the depths of recession by a board chairman who won’t budge, and a yes-man CEO who keeps playing whack-a-mole with the competition, it’s time for a shareholder revolt. The CEO needs to be immediately replaced, and the board of directors needs to be voted out in November at the quadrennial shareholder’s meeting.