Here are the take-aways:
1) The Department of State (DoS) like the Army needs to greatly expand in order to have the proper force structure for the wars we are fighting.
2) Although there has been bureaucratic tension between the DoS and the military, at the lower levels both agencies work well as demonstrated by the Provincial Reconstruction Teams (PRT).
3) The dysfunction of the higher levels is demonstrated by the creation of Lieutenant General Douglas Lute's position of "war czar" and the need for a better organized National Security Council. The best way to fuse the DoS and the Department of Defense is to expand on the Goldwater-Nichols Department of Defense Reorganization Act of 1986 and create a Foreign Policy Director (FPD) who would manage both departments. If this happened, bureaucratic rivalries would diminish much like Goldwater-Nichols eliminated much inter-service rivalry.
4) Goldwater-Nichols has been a tremendous success, in Iraq today we have Navy and Air Force personnel serving with Army Soldiers at the platoon level. Building on this, we should in turn have the DoS and the Army work at battalion and lower levels.
5) Counterinsurgency is not only the realm of the military but also the State Department. The DoS has the personnel who have the intellectual capabilities to tackle many of the issues relating to Counterinsurgency. They should be the "spoon" for eating the soup we call insurgency.
6) The PRT model should be preserved even after the conflicts at hand are over. Its predecessor, the CORDS program, was quickly eliminated in Vietnam. The PRT has many uses beyond just counterinsurgency, e.g. humanitarian missions and building military and diplomatic ties at the midlevel between the US and other nations.