The feature article in the latest issue of Foreign Affairs is "Saddam's Delusions," a de-classified summary of a longer report that the US Joint Forces Command (JFCOM) published in March. (Click here for the full report, and here for the transcript of a JFCOM media roundtable on the study.) Based on documentation and interviews collected since the 2003 invasion, the report is a mix of the new (the fedayeen's dedicated attacks on American and British invaders had more to do with fear of execution than fanaticism), the reconsidered (the ineptitude in the top ranks of the Iraqi military seems deeper than anyone expected), and the obvious (from 1991 to 2003, Hussein worried more about internal threats than a possible US invasion).

Newspaper headlines about the report said, in one form or another, "Hussein Duped By His Own Government." Yet, as much evidence there is that Hussein's civilian and military advisors lied to him, I'm not 100% convinced he believed what he was hearing.
The depiction of Hussein that emerges from the report is vintage Hitler in the bunker. The Iraqi autocrat, like his German predecessor, insured through terror and intimidation that he would never receive an objective assessment of his own country's military capabilities. Subordinates, including his own sons, used a combination of obfuscation, flattery, and exaggeration to tell Hussein what he wanted to hear: Iraq was still strong; its enemies, both near (Iran) and far (the United States), were afraid of what the Ba'athist regime could still manage; when war broke out, the army was making a courageous stand to defend Baghdad (when, in fact, the Iraqi military was quickly disintegrating).
However, even the best liars--their skills honed by years of practice, and constant fear of execution--don't always succeed. Obviously, Hussein was far more concerned about his personal survival than any other matter, including Iraq's real power viz its enemies. You might use that same argument to arrive at a different conclusion from that of the JFCOM study: Hussein new that, frequently, he wasn't being told the truth. His iron grip on power made the fact that people were still bothering to lie to him, out of fear for their own lives, more important than the value of the information he was receiving.
In the surveillance-crazed nightmare world of Iraq under Hussein, he had more than one source of information about practically everything. The JFCOM study provides a vivid picture of the many layers of informants and spies: for example, a commander in the Second Republican Guard Corps told his American interviewers how he took great pains to invite to every important meeting all the spies on his staff, including the ones he wasn't supposed to know existed. While it's entirely possible that Hussein did not have an accurate answers to some questions for which alternate sources of information were not readily available (for example, the real status of his "wonder weapon" programs, which depended on specialized technical skill not in great abundance in Iraq), other issues, such as the readiness of Iraqi army units, were more commonplace, and therefore easier to assess.
The cruel, manic logic of tyranny is something that, thankfully, most Americans can't understand. However, if you really want to get under the skin of Saddam Hussein, you might have to admit that, in the end, he might not have cared how weak his regime really was, as long as it remained under his control--and as long as his bluffing kept the West from invading. Hussein handled one of these threats well, because of its familiarity. On the other question, the unfamiliarity of the world outside Iraq (and perhaps outside of Baghdad and Tikrit) led to grave miscalculations.
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