Putting Petraeus Out of the Loop

April 27, 2011 Craig Pirrong

President Obama has named Leon Panetta to replace Robert Gates as SecDef, and General David Petraeus to replace Panetta at CIA.

Glad to hear Panetta’s alive. I was wondering.

Here’s my quick take. Petraeus seems completely out of place at CIA. He’ll be completely isolated with no real relationships within the agency. He should be head of the Joint Chiefs–or SecDef, although it’s problematic having the Pentagon headed by a man immediately out of uniform.

But Obama is at war with the Pentagon, and that conflict is going to intensify due to the budget issues, the incompetence and incoherence of Obama’s “campaign” in Libya, and the Afghan ulcer. Having Petraeus as top hat at the Joint Chiefs (or SecDef) would place a well-known, popular, and smart individual opposite Obama in that battle. So, he’d rather have a political type–a reliable Democrat politician to boot–in the Pentagon to help him in his fight with the rest of the building–and the rest of the military. At CIA, Petraeus might as well be on the moon–which is just fine with Obama.

About Craig Pirrong 238 Articles

Affiliation: University of Houston

Dr Pirrong is Professor of Finance, and Energy Markets Director for the Global Energy Management Institute at the Bauer College of Business of the University of Houston. He was previously Watson Family Professor of Commodity and Financial Risk Management at Oklahoma State University, and a faculty member at the University of Michigan, the University of Chicago, and Washington University.

Professor Pirrong's research focuses on the organization of financial exchanges, derivatives clearing, competition between exchanges, commodity markets, derivatives market manipulation, the relation between market fundamentals and commodity price dynamics, and the implications of this relation for the pricing of commodity derivatives. He has published 30 articles in professional publications, is the author of three books, and has consulted widely, primarily on commodity and market manipulation-related issues.

He holds a Ph.D. in business economics from the University of Chicago.

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Putting Petraeus Out of the Loop

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