Shoots, Fails, and Leaves
And he's right.
So long as we remain in Iraq, we haven't failed. We are failing. If the action [war in Iraq] continues into the present, it is grammatically improper to use either the past tense [we failed] or the present perfect tense [we have failed], both of which are for events or situations that concluded in the past.
In a case such as the Iraq war debacle, it is imperative to use the present continuous (or present progressive) tense, employed to describe an event or situation that started in the past and continues through to the present.
There's no real consensus on whether we started failing before or after the mission was "accomplished", but there's little argument that we're failing right now. It's nice to see that we've finally got a decent grammarian in the national security adviser position. How can we chart a course to the future, after all, without a firm grasp of the past and the present?
Here's hoping that Hadley and his crack staff can come up with a new, more muscular grammar for Iraq, although it's looking more and more like the third conditional is the only remaining option.