SYNOPSIS: Things are going worse than ever in post-sovereignty-handover Iraq. U.S. deaths are on the rise, the insurgency controls large parts of Iraq, and the reconstruction is stagnating but the so-called liberal media is not paying attention anymore. If we want Iraq to succeed, we have to change course

A funny thing happened after the United States transferred sovereignty over Iraq. On the ground, things didn't change, except for the worse.

But as Matthew Yglesias of The American Prospect puts it, the cosmetic change in regime had the effect of "Afghanizing" the media coverage of Iraq.

He's referring to the way news coverage of Afghanistan dropped off sharply after the initial military defeat of the Taliban. A nation we had gone to war to liberate and had promised to secure and rebuild - a promise largely broken - once again became a small, faraway country of which we knew nothing.

Incredibly, the same thing happened to Iraq after June 28. Iraq stories moved to the inside pages of newspapers, and largely off TV screens. Many people got the impression that things had improved. Even journalists were taken in: a number of newspaper stories asserted that the rate of U.S. losses there fell after the handoff. (Actual figures: 42 American soldiers died in June, and 54 in July.)

The trouble with this shift of attention is that if we don't have a clear picture of what's actually happening in Iraq, we can't have a serious discussion of the options that remain for making the best of a very bad situation.

The military reality in Iraq is that there has been no letup in the insurgency, and large parts of the country seem to be effectively under the control of groups hostile to the U.S.-supported government.

In the spring, American forces won an impressive military victory against the Shiite forces of Moktada al-Sadr. But this victory hasn't curbed the movement; Mr. Sadr's forces, according to many reports, are the de facto government of Sadr City, a Baghdad slum with 2.5 million people, and seem to have strengthened their position in Najaf and other cities.

In Sunni areas, Falluja is enemy territory. Elsewhere in western Iraq, according to reports from Knight Ridder and The Los Angeles Times, U.S. forces have hunkered down, manning watch posts but not patrolling. In effect, this cedes control of the population to the insurgents. And everywhere, of course, the mortar attacks, bombings, kidnappings and assassinations go on.

Despite a two-month truce between Mr. Sadr and the United States military, heavy fighting broke out yesterday in Najaf, where a U.S. helicopter was shot down. There was also sporadic violence in Sadr City - where, according to reporters, American planes appeared to drop bombs - and in Basra.

Meanwhile, reconstruction has languished.

This summer, like last summer, there are severe shortages of electricity. Sewage is tainting the water supply, and typhoid and hepatitis are on the rise. Unemployment remains sky-high. Needless to say, all this undermines any chance for the new Iraqi government to gain wide support.

My point in describing all this bad news is not to be defeatist. It is to set some realistic context for the political debate.

One thing is clear: calls to "stay the course" are fatuous. The course we're on leads downhill. American soldiers keep winning battles, but we're losing the war: our military is under severe strain; we're creating more terrorists than we're killing; our reputation, including our moral authority, is damaged each month this goes on.

So am I saying we should cut and run? That's another loaded phrase. Nobody wants to see helicopters lifting the last Americans off the roofs of the Green Zone.

But we need to move quickly to end our position as "an occupying power in a bitterly hostile land," the fate that none other than former President George H. W. Bush correctly warned could be the result of an invasion of Iraq. And that means turning real power over to Iraqis.

Again and again since the early months after the fall of Baghdad - when Paul Bremer III canceled local elections in order to keep the seats warm for our favorite exiles - U.S. officials have passed up the chance to promote credible Iraqi leaders. And each time the remaining choices get worse.

Yet we're still doing it. Ayad Allawi is, probably, something of a thug. Still, it's in our interests that he succeed.

But when Mr. Allawi proposed an amnesty for insurgents - a move that was obviously calculated to show that he wasn't an American puppet - American officials, probably concerned about how it would look at home, stepped in to insist that insurgents who have killed Americans be excluded. Inevitably, this suggestion that American lives matter more than Iraqi lives led to an unraveling of the whole thing, so Mr. Allawi now looks like a puppet.

Should we cut and run? No. But we should get realistic, and look in earnest for an exit.

Originally published in The New York Times, 8.6.04