leon panetta will replace robert gates as secretary of defense. that when gates retires later this summer. general petraeus comes home from afghanistan to fill panetta's open slot as the cia. and petraeus' former deputy at general command general john allen will take over as top commander in afghanistan. the bottom line, a u.s. military general will now be running the cia. and a cia guy will be our new secretary of defense. the game of musical chairs still subject to congressional confirmation hearings but with no new faces entering the mix how if at all will a change in seats, a change policy, and military strategy abroad? joining us now lieutenant colonel anthony schafer, director at the center for advanced defense studies, also author of the book "operation dark heart" which was censored by the pentagon. also with us, washington post columnist david ignacias. look at what he had to say about all of this a long time ago, back in march, before anyone was talking about it. >> this is the prediction which is that leon panetta will go to defense to replace secretary gates leaving in the summer and that general petraeus will come back from kabul to become the next cia director. >> so, foresight to say the least from him. tony, i would like to begin, however, with you. specifically on the department of defense. it is so easy to get lost in the weeds with all of this but the real headline is that america is going to have a new secretary of defense, a new person in charge of the pentagon at a time when our budget is massive. we spend as much money on our defense as the next 19 countries in the world combined. how are we to interpret the decision to put a cia director in charge of the pentagon? >> well, i think mr. panetta's being hired because of his deeper background relating to budget and i have seen a lot of talk about the fact he's been compared to clark clifford coming in gnthe nam vietnam era. cap wineberger had a reputation of being a cost cutter but chartered to win the war. my concern here is the record at cia has not been stellar and in my earlier preinterview with your folks i talked about the fact it's bob nardeli ceo of home depot hired to chrysler. i'm not convinced that someone without the best record in one organization with five times the responsibility is a good move. >> david srks that the right interpretation, though, that this is a set-up for potential budget cutting and a major overhaul at the pentagon or leaping to conclusions? >> no, i think that major reason why secretary gates recommended panetta as a successor is panetta's background in budget issues, chief of staff at the white house, budget director. i also think it's a little strong to say that panetta ran the cia into the ground. that's a tough job but from what i hear panetta was generally good for cia morale. he thought cia's battles on the hill and within the administration fairly successfully. i think, you know, he is a senior player. obama wants a team of people who are strong personalities and the fact that gates recommended panetta so strongly is decisi decisively. >> if we rep s ep the opening day interpretation of a budget cutting at the pentagon which is welcome for a variety of deficit hawks, the other issue as we stay on defense and i will get to intelligence but as we stay on defense is does the withdrawal of general petraeus from the theater of war in afghanistan open the door for an easier withdrawal politically or rhetorically from the middle east, or is that, again, leaping to conclusions, tony? >> i think we are on a path to so-called decent interval and take very hard looks at what we are trying to achieve and i think some very hard realities that -- look. i admire general petraeus. he's a great guy. let's use the house metaphor. he built a great house and every stick of wood is infected with termites and leaving the issue is pakistan and may be the upside of it. the real battle in pakistan waged by cia and may be the one upside. >> and creates the segue i was heading to, david. does the decision moving away from the department of defense and wars and looking at the new cia, a cia run by a commanding general in the middle east, is tony's interpretation the right one, the cia will now become a paramilitary organization focusing on pakistan under the guidance of a former military general? is that right? >> the cia is a paramilitary organization. it has those capabilities. i think this is a signal that the administration is serious about the exit ramp, declining numbers of uniform military personnel starting this july. i think within a year we'll see all of the 30,000 person surge out of afghanistan. and i think that general petraeus in his new role at cia will have oversight of predator drones, of operations, personnel on the ground. this will move in afghanistan and to the extent possible in pakistan to a paramilitary opposed to a uniform military campaign over two or three years. >> david, the type of policy discussions seem like they have a certain level of political appeal, certainly support for reducing the public war in the middle east and seems that's possible. there's certainly public support for reduced defense spending which is being interpreted or offered up as such in this transition and there seems to be a certain amount of support for an amplification or an aggressive use of intelligence and predator drones to deal with pakistan, all three of those appear to be in this interpretation. am i missing something? >> no. i think you said it right. i think this is an administration -- when i talked to the white house, talking to people at the pentagon, what i hear is that they want this era of expeditionary wars in which tens of thousands of american troops are sent abroad to fight in iraq, afghanistan, they want that period to end and that's replaced by growing use of cia, paramilitary forces. >> which then brings us i guess to the final interpretation, tony, how blurry is the line when you can switch the general and put him in terms of the cia and take the cia guy and put him in charge of the pentagon? how blurry's the line between the military and american intelligence and is that a good or a bad thing and how are we to know? >> well, i think that jury's out for a while. i have worked on both sides. i think mr. vickers coming over from cia who's now the senior intelligence officer for the pentagon, he was well-known in charlie wilson's war for being one of the guys working at cia and the influence is increasing and the pentagon cross pollination going on. frankly we have talked about this before on your show. the big footprint of forces forward isn't helping us and i think it's time to be smarter about the application of deadly force and a good move in many ways. >> the one skepticism or concern and i'm sure we'll talk about this later in the program, david, is what is the -- what are with to think of a world where the public war may be diminishing but the secret war being waged by the cia may be increasing? >> well, we should think is that congressional oversight of intelligence activities needs to be extremely vigorous. it's going to be really important to keep a close eye on general petraeus. he's creative and needs oversight. >> absolutely. >> congress has to step up. that's part of the deal here. >> how do you create oversight for a deliberately secretive organization? >> we have mechanism we have deinvolved over time the rules. the rules are there. the procedures are there. they have to be followed and people, members of congress will have to take it seriously now. >> tony, what are your thoughts? >> absolutely. i've run very -- what they call black operations and i had to have congressional oversight in the form of investigations everything i was doing every year. there's mechanisms there. they have to be picked up and used. you cannot ignore them. they're there for the benefit of the people running it and the congressional oversight guys being sure the money is spent properly. >> before you go, for the benefit of somebody like myself, who is it in congress that needs to be doing this such that somebody like myself can harass them as such, david? >> the chairman of the house and senate intelligence committees and the ranking members and the other senior congressional leadership. so-called gang of eight. they know all the secrets and they have to police them and ride herd for the nation because the public won't know and shouldn't know. they will and they have to do their job. >> thank you for the analysis and helping to educate us and see through some of the musical chairs, gentlemen. david, a pleasure. tony, it is always a pleasure. thank you, guys. we'll take a little bit of a break here. coming up as we just mentioned, the mill tarization of america, particularly the intelligence agency. we have the story you probably have not heard about this latest game of white house musical chairs. plus, is the president now the one who refuses to let the birther debate die? keeps bringing it upality fund-raisers. we'll ask our mega panel, susan, karen and jimmy on deck. along with a royal gamble. only thing more fun than a royal wedding ask o inding is one you. we'll get the line on whether martin bashir will be the first to cry when he joins us a little later. 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let's keep it compartmentalized. first on the defense side. the interpretation is opens the door for budget cuts, maybe makes it easier for the withdrawals. this would seem to be a political net positive for the president if, in fact, those interpretations play out. >> listen, leon panetta will be great over at the pentagon. i'll tell you why. because when he was a member of congress was when they balanced the budget so i'm thrilled that he's going over there. i hope he slashes like hell. i hope she strehe streamlines a it more efficient and gets the troops out. >> the other side, susan, apparently the ability to escalate the secret side of the war and we heard david say learn the chair people for the house intelligence committee and the senate intelligence committee because a former general now running the cia is going to be potentially very active and we're not going to have nearly as much information as we once did. how do you look at that possibility? >> well, it's certainly an interesting melding of his military background now into the cia. it's also going to be interesting how he's going to be able to, quote, command there. as far as, you know, no longer having troops to oversee but civilians which is another big difference but when's good about the appointments that were made today and good for the country is that we probably will not see any partisanship here. i think you will get a lot of support from republicans and democrats and, in fact, may be the last bipartisan thing we see washington do in a long time. >> do agree, karen? >> from susan's lips to god's ears. i certainly hope. the one thing i think to susan's point that's important is panetta and general petraeus command a tremendous amount of respect both from the national security teams, from the sort of national security community, as well as from congress. so i think these moves for that reason i think will help also ensure that the president can have some continuity, you know, i read somewhere that the president decided to basically continue on the path along the decision that is he's already made, not necessarily signal kind of a shift. so i think that's part of what we should read into this. >> we'll set down the defense conversation for time being and bring it up later talking about bradley manning but while i have you i feel like i have no choice but to bring up the birther debate. not because i want to but the president keeps bringing it up. listen to the president. >> my name's barack obama. i was born in hawaii. the 50th state. of the united states of america. can i just say i was there? so i knew that i knew had been born. i remembered it. >> susan, is the president now perpetuating this absurdity? >> yeah. i don't know why he took it this far. he did have, frankly, a win on the issue and could have let it die down. obviously they think it's a bigger win than most of us looking at it think it is but they decided to play it up. i'm not sure when he said he wanted to work on more serious things going to tape oprah was the transition he wanted to make. >> jimmy, is that a fair criticism? >> no, it is not. >> of course not. >> susan, if you had the chance to go on oprah, would you go? the answer is yes. and so would i and anybody else. >> he's the president. >> you're right. he's the president and he gets to go on oprah. you know what? that's the beauty of oprah. she doesn't have to let him. it's simple. the guy won on the birther issue. racists all across this country, i said it, racist. everywhere. the north, in the south, in the midwest and california. everywhere. who still don't believe it, are still going to spout it and every time they do i want the president to respond. it is a winning issue. when you're winning, keep winning. >> at the end of the day, do you agree, karen? i say, hang on. i thought we were supposed to be worried about jobs or the banking system or maybe health care or how about the fact that we blow two thirds of the energy that we consume in this country out the windows of our houses? and yet both political parties willing to play wrestling games with birtherism. >> dylan, you're right. you and i both know as jimmy said, racism and prejudice still exist in america and i think the deeper issue that we shouldn't get distracted from, two points on the sort of cultural side. there are people who -- it is not about the birth certificate, guys. it is about using that as a way to question the otherness. >> correct. >> and a level of discomfort with the fact that the world is changing. my mother used to carry my birth certificate in her wallet because she's white and i'm not and she would be worried that something would happen me. the idea of mixed race kids, kind of a new idea and people who are very afraid of the way that the country is changing. that's the cultural reality. on the other side on the political side, let's be clear. the rnc and the gop really, you know, should take some lumps for this because every single time they were asked about this and they said, well, i take him at his word, that's a load of crap. to do away with that issue is say, of course, he is an american citizen. let's move on. >> my favorite -- >> couldn't agree with you more, as a republican. >> my favorite statistic, i mentioned this yesterday. according to nate silver, 46% of americans are certain donald trump was born here. >> they might be right. >> here meaning this planet, dylan? >> no, we wouldn't know. we can't find out the answer to that question. that's a pleasure to see you guys. thank you very much. we're going to keep karen, susan and jimmy around for part two, the real solution to the pain at the pump. the specialist joins the conversation and why he says none of the ideas out there will lower our soaring costs but his idea will, after this. ♪ ♪ ♪ ♪ introducing purina one beyond a new food for your cat or dog. explorers... great thinkers. they're the future of america, so let's build them up strong, and give them our cheese. kraft singles american cheese. we're always made with milk. and more kids get their calcium from us than any other american cheese. the future of our country is in their hands. hey look it's the future senator from wisconsin. kraft singles. the american cheese. yeah, let's check out the horses under the hood! show me the carfax. show me the carfax. horsepower, foxpower, same thing. just show me the carfax. before you buy a used car, get a carfax vehicle history report. see accidents and service reported to carfax... and a price based on the car's history. free, at thousands of reputable dealers. just say, show me the carfax. high gas prices obviously taking a bite out of consumers' wallets. padding the coffers of the world's largest oil companies and many investors big and small. profits for instance at exxon mobl up 70% in the first quarter, $11 billion for them, similarly at shell, profits up 30%, more than $6 billion. conoco phillips, bp also reporting billions in profit. rising prices, typically provoke outrage, but few people have a real understanding of why prices rise so far so fast and more importantly what actual tools are at our disposal to bring them down to more affordable levels now. which brings us to today's specialist. dan dicker, oil trader and author of "oil's endless bid," our panel also rejoins us. karen, susan and jimmy. your basic idea is what? >> the basic idea, dylan, is that supply and demand fundamentals have been overrun by investment money or speculative money, if you like, that's trying to chase hard assets, particularly oil, and trying to capture what is a rising price in oil but, in fact, fueling the fire. because the more buyers you get rushing in to try to buy oil the higher the prices naturally go. >> talk about this. i'll use myself as an example. so i have a small investment portfolio that i've tried to keep track of in a way i don't have to pay too much attention to it working here all the time and one of the things that i have done is buy the u.s.o. which is an oil etf and other commodity etfs. i'm not alone, a lot of people taking some of the savings and putting them in to these hard commodities opposed to more traditional active investing into the stock market, apple computer, whatever it might be. what's wrong with a guy like me doing something like that? >> well, the problem, of course srks that there's two problems. it hypes the price. >> you have a bunch of people like me buying oil when i have no interest in using the oil. >> exactly. the bottom line is, if you had, for example, houses and certain number of houses but all of a sudden everybody wants to buy a house over there -- >> just because they think they're worth more money, not because they want to live in them. >> because i want a house on that street for another house i own somewhere and this house may only be worth $100,000 but what if i really want it badly enough? the only way to get an owner out is to pay for it. >> your argument is unless you have the intention to use the oil, or to use the corn or whatever it is we're talking about, that only those types of people should be allowed to buy commodities because you get the price distortions from people like m