♪ ♪ (theme music plays) RUBENSTEIN: Hello, I'm David Rubenstein and today we're going to be in conversation with Peter Baker and Susan Glasser about their new book, "The Man Who Ran Washington", "Life and Times of James A. Baker III".

So thank you very much for joining us.

BAKER: Dave.

Thanks for having us.

GLASSER: Thank you so much.

RUBENSTEIN: So, number one, Peter Baker is not related to James Baker, Peter Baker and Susan Glasser are married.

BAKER: Right.

RUBENSTEIN: So for those who don't know, who've been under a rock for the last 20 years or so, Jim Baker successively was Ronald Reagan's Chief of Staff, Ronald Reagan's Secretary of Treasury and George Herbert Walker Bush's, um, Secretary of State.

Why do you think somebody that held those three powerful positions for years and consecutively, uh, had no major book written about him up until your book came out?

Why do you think that was?

GLASSER: Well, you know, David I think one of the reasons that Peter and I were so enthusiastic about doing this project is that he's really a unique figure, uh, Tom Donilon who was Obama's National Security Advisor, he, when we told him we were going to work on this, he said, you know, he was the most powerful unelected official, really since the beginning of the Cold War period.

And I think we not only agree, but we saw it as an opportunity to tell the story, not only of a really unique American life, but also of, of Washington, really from the end of Watergate to the end of the Cold War.

RUBENSTEIN: Uh, Jim Baker is born in Houston to a reasonably wealthy family.

Is that correct?

BAKER: Yeah, his family was this Houston aristocracy.

They really helped build the modern Houston.

In fact, Jim Baker, James A. Baker III was actually the fourth James Addison Baker, that tells you a little bit about how far back his family went and here's why he was the fourth, but called the third.

When we spent seven years on this book we never fully understood that mystery, he says the family doesn't know how to count very well.

But in any case, the point is his grandfather, great grandfather, father, were pillars of the Houston community, helped build a lot of the institutions of the modern city.

So he came from a very privileged and very important family.

RUBENSTEIN: And he was taught to go to law school and then practice law, maybe at the family firm, but to stay out of politics.

Is that correct?

GLASSER: That's right.

That was even the family motto, uh, you know, was to stay out of politics.

The only previous Baker to have been in politics at all was his great grandfather who, uh, immigrated to Texas from Alabama and was a friend of Sam Houston's, a lawyer.

He ran for, uh, and became an elected judge during the Confederacy.

That was, uh, obviously, a very bad experience.

He was thrown out along with all the other judges in reconstruction and ever since then, the family rule pretty hard and fast was, "Politics is a dirty business.

Don't have anything to do with it."

RUBENSTEIN: So you point out that Jim Baker went to Princeton, almost flunked out because he was having too good a time.

And then he ultimately went the University of Texas Law School and he couldn't go to the family law firm because of nepotism so he started practicing law.

But where did he meet George Herbert Walker Bush?

BAKER: That's such an important point in his life, right?

And it's and one things about doing this book that was really interesting was to really focus on how the hinges of history changed by complete happenstance.

So he meets George H. W Bush in Houston, Bush has just arrived as an oil man, uh, a transplant from Connecticut.

They had a, his cousin, Bush's cousin actually knew, uh, Mary Stuart, uh, Baker, his first wife's family back in Ohio, but it was really the Country Club of Houston where the two became great friends because they were put together as double's partners.

But it wasn't just a country club friendship.

I mean, they really became, over the period of years, really close friends.

Their families got together on Thanksgiving and played, you know, football much like The Kennedy's did, they got together at Christmas for cocktails, they, the boys were, the Baker boys, he had four of them, were relatively close in age to the Bush boys.

Uh, and I think that they forged a friendship that both of them later in life told us they considered to be like siblings.

RUBENSTEIN: So in 1964, George Herbert Walker Bush runs for the Senate and loses.

He then runs for the Congress in 1966 and wins, uh, two terms, and then he has a chance in 1970 to run for the Senate again and is that when he asked Jim Baker to be his campaign manager for that campaign?

GLASSER: Baker was already getting tired of practicing law and doing what the family tradition had been in Houston.

He was looking, I think, for something different in his life.

Uh, Bush had been a success.

I think Baker, he told us he was a little dazzled even by his friend Bush at this point in their lives, right?

You know, Bush was a little bit older, he'd been a war hero in World War II, he was making an independent way for himself, he, you know, his father was this very regal Senator from Connecticut.

But here's Bush in Texas forging his own path whereas Baker had not really broken away from the constraints of his very micro managing father at this point.

And so in 1970 terrible thing happens, his wife dies, she's still in her 30s leaving four young sons.

Uh, Baker is almost inconsolable with grief.

Uh, he's left alone with his four boys he doesn't know what to do.

And, uh, it's Bush who really pulls him out of it by suggesting that he come and work with him and he runs Harris County for that Senate race for George Bush.

RUBENSTEIN: Okay.

Unfortunately, for George Herbert Walker Bush and Jim Baker that campaign did not work.

Lloyd Benson, uh, was the democratic nominee, which is not what they expected and Lloyd Benson won.

So George Bush went back, um, he basically got a job in the Nixon administration.

Is that right?

BAKER: Yes.

RUBENSTEIN: And what was the first job he got?

BAKER: Well, the first one was, uh, was the, the UN job, right?

He went up to the UN as his ambassador, Nixon's ambassador, for about a year.

Loved, it really became a real formative moment because he learns foreign policy then.

Then a succession of jobs, Republican National Committee Chairman, Envoy to China, and eventually for Ford, uh, CIA director.

RUBENSTEIN: So he gets these jobs in Washington DC.

Does he say to his friend Jim Baker, "Hey, I'm a big deal on Washington and now you're, you're nothing.

You're just a corporate lawyer."

Or did he say, "Why don't you come up to Washington and I'll help you get a job?"

GLASSER: Well, first of all, I should say that Baker is a very lucky guy and any great career like his, right, is both a combination of skill and hard work, but also just luck and timing and in this case, he, Baker actually comes up and has a job interview for a big job in Richard Nixon's justice department on the very day that the Watergate scandal is taking out Nixon's attorney general, his White House Chief of Staff, Haldeman and Ehrlichman and so that job never comes through and Jim Baker is really lucky to avoid service in Watergate scarred Washington.

So fast forward to the Ford era, Bush is then the Envoy to Beijing, as Peter mentioned.

And, uh, he, an old friend of his from Washington comes through, uh, who's just going to become the Commerce Secretary.

And guess what?

You know, Bush has a friend to recommend for him and that is the very unlikely story of how Jim Baker at the age of 45 ends up in Washington in this senior job as the deputy at the Commerce Department.

RUBENSTEIN: So he gets that job and quickly thereafter he becomes the chief delegate hunter for Gerald Ford in the 1976 campaign to get the, uh, to get the nomination for the party, is that right?

BAKER: Yeah, he was, once, once wore the accidents of history, right?

Baker's kind of a nobody at the Commerce Department, he's a nobody in the scheme of the national politics, but because Watergate had wiped out a whole generation of young Republican operatives, suddenly there's this opportunity for him and when Ford's, uh, longtime political consigliere dies in a car accident, uh, they bring in Baker, to be the delegate hunter at the Convention where he's fighting off Ronald Reagan.

And Baker does such a good job that they literally nickname him and his walkie-talkie, uh, code name of the Convention, they nickname him the "Miracle Man".

And from there on boom, it's just a, you know, it's like a rocket ship to the top, that he had proved himself in the most, you know, hot house, uh, uh, environment possible with all the stakes, uh, on the table, uh, and suddenly he's now in the inner circle of the president of the United States.

RUBENSTEIN: So in 1980, um, his friend decides he's gonna run for president of the United States, George Herbert Walker Bush, and he's looking for a campaign manager and he says to Jim Baker, "Why don't you be my campaign manager for my presidential campaign?"

And, did Jim Baker say, "I want to do that."

BAKER: It was always assumed he would.

Everybody knew that Baker would be with Bush if he ran for president.

In fact, there was, you know, John Connally, the Texas governor, wanted Baker to run his campaign, he said, "Look Bush's my guy."

And this is the moment when the two of them really, this partnership of theirs blossoms into, uh, you know, what it becomes.

And, and, and it's Baker who helps him get from being almost nowhere in the polls.

So they literally called themselves the "asterisks club" and had a button made up called that because he was just an asterisk in the polls.

They got all the way from that to being, uh, you know, the, the toughest competitor that Reagan faced in 1980 in the primaries.

RUBENSTEIN: So the campaign gets down to two candidates.

There were many candidates running, but it gets down to George Herbert Walker Bush and the favorite candidate, Ronald Reagan.

George Herbert Walker Bush is maybe not having enough money and maybe not doing as well as he would like to do and Jim Baker wants him to drop out so maybe he can become Vice-President but Bush says, "I don't want to drop it.

I'm going to keep going."

How did Baker prevail?

(laughs).

BAKER: Well, this is what happens when you have a really good friend, right, running your campaign.

It's the, it's the reason you have somebody like that run through who will tell you the truth when you don't want to see it.

Bush didn't want to see it.

He had been running, he was so competitive, he thought he could still make some traction.

Baker saw more clear-eyed that the contest was over, that Reagan was going to win.

And the, the, the second place is going to be on the vice presidential ticket he had to make sure they didn't alienate Reagan by keeping the campaign going too long, by saying things that would, uh, anger, uh, Reagan and his team.

So one day basically Baker tells David Broder from the "Washington Post", "No.

We're not gonna compete in California.

We're gonna end up closing the office there.

We don't have the money."

Bush reads this in the paper, he's furious.

His, his campaign manager's basically conceded the primaries right there in print and he didn't know anything about it.

Calls him up, "What's this about?"

And Baker says, "Look, we don't have the money.

We just don't have the money."

And there's this come to Jesus moment in Houston at the Baker, at the Bush home, where Baker basically lays it online, "It's time for you to drop out."

And Bush is really quite upset about this, Barbara is upset about this, but he finally heeds the advice.

And it really is that advice that puts him on the path to still, uh, you know, getting on the ticket in the Convention.

RUBENSTEIN: Well, they go to the Convention but George Herbert Bush doesn't really think he's going to be picked as Vice-President.

He had called Reagan's economic program voodoo economics and so forth.

So what happens when they get the call that Ronald Reagan calls George Herbert Walker Bush and what does he ask him?

GLASSER: Well, what's amazing is the what?

The events that led right up to that, because in fact, Reagan was very actively considering the former president Gerald Ford to be his vice president, which, you know, think about it, it's kinda mind blowing, right?

Uh, and in fact, in the end the negotiations at the Convention broke down over some of Ford's demands that, you know, "Would you, who do you call Mr. President?

If you say, "Mr. President", right?

Do they both turn their heads?"

Uh, and so this sort of impractical idea, which was nonetheless being very actively considered blows up at the last moment in the campaign and actually Baker and Bush were so convinced that nothing was going to happen that they had sent the reporters who were waiting outside at the hotel for them home for the night, and then they had to turn around and say, "wait a minute guys, there's still something, you know, you might want to come on back."

RUBENSTEIN: So ultimately he's picked, um, and he is the vice presidential nominee, but where is Jim Baker?

Jim Baker had no role so what role did they give Jim Baker in the general election campaign?

BAKER: Right, so they, the Reagan people offered Baker deputy campaign manager or so forth and he didn't want to do that.

And he came up with the idea, a friend suggested to him that they, he take over the debates.

So he'd be the debate negotiator who would, uh, sit down with the Carter campaign, the Jimmy Carter Campaign and the, uh, John Anderson, who was running as an independent and help, uh, figure that out.

And really, you know, uh, like Craig Shirley, who is one of the Reagan aides who later became a biographer, tells us that he thinks that was really the key moment is sealing the relation between Baker and Reagan, because Baker urges Reagan to debate when a lot of other people around him were reluctant, worried that Reagan wouldn't be able to handle it, that Carter might get the best of him and Baker was telling him to do it.

And when, and it's that faith that Baker shows in Reagan's ability to debate that I think helps, uh, make him pivot in be, Reagan's mind from a Bush guy to a Reagan guy.

RUBENSTEIN: So it's widely seen in the one debate they had a week before the election that, uh, Ronald Reagan won.

And so when he won, he won the debate and then he also won the election handily.

So when he wins the election, is there anything for Jim Baker?

Who, who is going to decide what happens with him?

Did he, did he say, "I have a job owed to me?"

Or what, what was the thinking?

GLASSER: Well, actually the, the job was handed out that very night and there's this amazing story, um, Baker's, um, second wife Susan learns by overhearing a conversation at their election night party in Los Angeles, uh, that Jim Baker is going to become the White House Chief of Staff burst into tears because in fact, in their very short marriage, uh, you know, remember his first wife had died, she had three of her own children, he had four children.

She'd also then had another daughter with the two of them so they had eight children, uh, and she's been, uh, essentially left alone to deal with this almost the entire time of their marriage, because he's then embarked on his new career in politics.

So it really was a pretty, pretty traumatic moment, but it was settled right away.

The intrigue actually to make Jim Baker White House Chief of Staff for Reagan has started even before the election, when two of Reagan's advisers were actively, uh, putting him on the plane with Reagan and trying to give him face time in the hopes of, uh, freezing out another Reagan official Ed Meese from getting that top job.

RUBENSTEIN: So Baker gets the job and, um, today in history, uh, as history has been written, he is considered the gold standard as Chief of Staff, the ultimate Chief of Staff.

He did it for four years and people said nobody's ever done it better and very few people last for four years as Chief of Staff.

But you point out in the book that he hated the job and he actually tried to get out of the job a few times.

Why did he not like the job and, and what was the secret of why he was so successful?

GLASSER: Well, I'm glad you brought that up because I think people often refer to him as the gold standard Chief of Staff without the other part and recognizing that it was a grueling, exhausting job.

Not only that, I mean, you know, the Reagan White House is famous for its infighting, backstabbing, intrigue, uh, you know, someone said to us every single day on that Reagan presidency, he acquired power and his internal rivals lost power.

Uh, you know, it was, um, something where his discipline, I think his ability to understand what really mattered, uh, in terms of moving the levers of Washington, uh, and the fact that his internal rivals like Meese, uh, did not really.

Uh, and so Baker was supremely good.

For example, uh, he early on made an arrangement with Meese, uh, who was given elevated status.

Meese would be a member of the cabinet.

He would have cabinet reigns, he would, you know, be, able to be in on any meetings, he would have this big title.

Uh, but, you know, Baker was the one who said, "Well, I'll deal with those unsexy things like the administrative functions, like the, uh, personnel office, like the legislative affairs office, like the communications office.

Well, of course, in Washington, those are all the things that matter and add to it he was also in charge of all the paper flow to and from the president's office.

And, uh, you know, I think that just tells you so much, uh, both about Baker and about how power works in Washington.

RUBENSTEIN: So Baker did such a good job that he actually became, in effect, the chairman of the reelection campaign for Ronald Reagan.

Is that right?

BAKER: Exactly right.

Yeah.

He was, uh, he wants to run it from the White House, you know, it's hard as incumbent president to have it run any other way, because it's, it's, it's, how can a sitting president basically have somebody outside the building, uh, managing his political future?

So it has to be Baker and he basically uses that as an opportunity to get rid of one of his internal rivals, somebody inside The White House that didn't particularly like Baker, Baker didn't really like him.

He sent him off the campaign so he would be campaign manager.

It's really just a way of just getting him out of The White House and out of his hair.

RUBENSTEIN: So as a result of that campaign effort, uh, Reagan won 49 States as I recall and so it was pretty good, uh, campaign victory for Jim Baker and for Ronald Reagan.

So does Jim Baker say, "I want to do four more years as Chief of Staff."

Or what happens?

GLASSER: He basically goes over and has lunch, uh, soon after that election with, uh, Don Regan, the Treasury Secretary right next door for The White House.

Reagan's actually furious with him and thinks they're blaming him for some leak of something or the other.

Uh, and this is the, uh, "Be nice to each other and make up lunch."

Uh, but they both get to talking and realize that they are sick and tired of their current jobs and they, a job switch is proposed.

And what's remarkable and it certainly tells you something about Reagan and his decision-making in the Reagan White House, they go and they tell this to the president that Baker would like to become the Treasury Secretary and Regan would like to become the Chief of Staff and Reagan basically says, "Okay."

RUBENSTEIN: But, uh, Jim Baker becomes Secretary of the Treasury and he brings over a lot of his loyal, uh, staff, he always had certain people with him that he brought from whatever job he had and then he gets tax reform through the first time since I think 1954 that had been a major tax reform bill and then he gets through the devaluation effect of the US dollar called the Plaza Accords so he's considered a very successful Secretary of Treasury.

But then his friend, George Herbert Walker Bush wants a run for president in 1988.

And does he ask Jim Baker to run the campaign and does Jake, does Baker want to do it or not?

BAKER: Well, Baker has no interest in doing it.

He is finally a cabinet secretary, he likes being a principal, principal, of course, is the Washington speak for a really important guy.

And he didn't want to go back to being a political hack, but he knew he would have to, he didn't really fight the program.

He just didn't want to do it too early.

So he, he let the Bush run in the primaries, uh, with his campaign staff and them came just for the final, for the final few months for the general election.

But it was kind of a near miss I mean, by the time that Baker takes over, Bush is trailing Michael Dukakis by about 17 points.

So it wasn't a guaranteed thing by any stretch.

RUBENSTEIN: Now, some people say that George Herbert Walker Bush won because Dukakis was a bad candidate, but he had an ad, the famous Willie Horton ad, which implied that, uh, let's say Dukakis will be soft on crime among other things.

And was Baker involved with that ad?

Did he approve it or did he kind of distance himself from it?

GLASSER: Well, both, uh, which is, you know, a skill and it's a very Baker like skill, but the bottom line is that, of course, he approved it, uh, as did Bush as Baker, uh, pointed out when, uh, asked about this years later.

The, the bottom line is it actually wasn't just the Willie Horton ad with its racial, uh, I was going to say, well, undertones, but really overtones, uh, that were pretty overt, uh, the idea that, uh, Dukakis was not just soft on crime, but was actively involved in a Massachusetts furlough program releasing, uh, some kind of, uh, you know, black criminal to, uh, do further harm.

It was a, it was a very, uh, explicitly racial ad, advertisement.

Now, Lee Atwater, uh, who was the kind of brilliant young political strategist, uh, he later got, uh, fatal cancer.

On his deathbed he apologized, uh, for the use of Willie Horton in that campaign.

Baker on the other hand has refused to apologize for it, although he has allowed that that might be one area where he does have regrets, but overall, this was a scorched earth campaign.

Remember Michael Dukakis, he was essentially a mild-mannered technocrat for Massachusetts.

It wasn't just on crime.

They turned him into an American flag hating, uh, Pledge of Allegiance, uh, refusing, uh, basically unpatriotic American and it was an extremely negative campaign because Baker is an absolutely unsentimental realist when it comes to politics and he understood it was probably the only way to get George Bush elected president after eight years of Reagan, was to run a very negative campaign against Dukakis.

RUBENSTEIN: So Bush is elected and, uh, the first decision he makes, the first announcement is, "My new Secretary of State is going to be Jim Baker."

Uh, did Jim Baker not want that job?

BAKER: Yeah, it was the least surprising announcement, I think in, in, certainly of the year.

Uh, everybody understood that Baker was going to be a Secretary of State and it was the job that he had angled for, you know, to him being Secretary of State was a job that was unworthy of his skill set, it was a challenge for him after all these years in Washington.

Uh, and the world was changing at that time.

To be Secretary of State as the Soviet Union was beginning to come apart, the empire was beginning to, to, to pull away from Moscow as, as the, uh, Cold War was starting to wind down.

That was a big challenge for Baker and something that he thought was, you know, definitely, uh, worth taking on and he, he wanted to do that job very badly.

RUBENSTEIN: Saddam Hussein invades Kuwait and the Bush administration decides, "We're gonna not let that stand."

And so they've send Jim Baker around the world.

They get support for, uh, the effort to kind of take, uh, Saddam Hussein out of Kuwait but also to raise money.

Uh, was he successful at raising money to pay for the war?

GLASSER: Well, of course, he was.

In fact, uh, you know, this was probably the, it was the first war in American history that almost turned a profit as a result of Baker's, what they called his, "Tin Cup Tour".

Interestingly, Baker, as Secretary of State, really embraced, I would say diplomacy.

That was probably, uh, you know, his true skill set along with a form of, uh, uh, natural abilities when it came to deal making and understanding what the person on the other side of the table needed.

And I think that, you know, there was a through line there in terms of some of the legislative deals that he cut when he was Reagan's Chief of Staff and Treasury Secretary with Democrats on Capitol Hill.

And then you see him taking that approach in a way to, to Soviets, uh, Mikhail Gorbachev and Edward Shevardnadze his, his counterpart as a Soviet foreign minister and then to the challenge of the Gulf War.

RUBENSTEIN: So the Gulf War is, winds up successfully from the American point of view and ultimately the, the Berlin Wall falls, communism kind of ends in, in, uh, at least, Eastern Europe for the time being and so forth so it looks like a pretty successful presidency.

So why would George Herbert Walker Bush not be able to get reelected easily?

What was the problem?

BAKER: Yeah, it's a pretty good question, right?

He had a pretty successful foreign policy presidency, but here's the trick, right?

It's a little like Winston Churchill.

Winston Churchill wins World War II and then is turned out of office because the public having felt like we had just won the Cold War now wanted to focus on what was happening at home.

Uh, and what was happening at home was a recession and Bush was not perceived to be a domestic president.

He kind of stumbled, I think, in communicating to the public that he... A) knew how bad things were for them, B) felt their pain to use a phrase that Clinton would use against him and C), he knew what to do about it.

And that was something that, uh, that Baker was brought in late, uh, to try to fix, but I think that, uh, by the time the Baker comes in the damage was already done.

RUBENSTEIN: So, uh, Jim Baker really didn't want to go run the campaign.

He preferred to be Secretary of State, but, uh, what was the nature of the way he was importuned to come back and run the campaign?

GLASSER: Well, I, you know, I think passive aggressive might not be a, you know, to, uh, a strong word for how both he and Bush were dealing with each other.

This was, this was really probably the most difficult period for their relationship.

And also, uh, Baker then became, I think, profoundly depressed at his return, uh, to the White House.

He, he became, uh, once again, he ran the campaign out of the White House where he's the only person ever to have served as Chief of Staff under two different presidents.

But, you know, perhaps he thought that it was already too late and, and Bush could not be saved, perhaps his heart wasn't really in it, uh, but even his own staff, uh, wondered what had happened to him in this period of the, the, the end of the 1992 campaign.

Uh, you know, there were intercessions made, uh, definitely hard feelings with Barbara Bush and other members, including George W. Bush in, in the Bush family who felt that, uh, you know, Jim Baker had looked out for himself, but he wasn't there, uh, when the going really, really got tough for George Herbert Walker Bush.

RUBENSTEIN: So, when Thomas Jefferson was preparing to die, uh, he said, "These are the three things I want on my tombstone, uh, author of the Declaration of Independence and, and creator of the University of Virginia."

And so forth.

What would Jim Baker say are the greatest accomplishments of his life?

GLASSER: Yeah.

Look.

Jim Baker profoundly wanted to be seen as and to be remembered as a statesman, uh, and not a fixer, not a handler.

And, uh, that's the thing that he almost certainly will want on his own grave.

That he was a statesman, uh, that he was a lifelong friend of George Herbert Walker Bush.

Uh, and remember for all that friction that I was just describing, uh, you know, a couple of years ago when President Bush did in fact pass away.

Uh, it's, it's, it's no accident that Jim Baker was there three times at his house on his last day of life that he was literally rubbing Bush's feet as, as Bush passed away.

Uh, and, you know, I, it was a very memorable scene, right?

To see him weeping, uh, at the National Cathedral when the state funeral of George Herbert Walker Bush was taking place.

And in fact, in Houston, uh, uh, where he grew up and spent his entire life, except for this period of time when he was in Washington, there's a park where there are two statues facing each other, uh, across the distance.

One of George Bush and one of Jim Baker, you know, speaking to each other, uh, across time.

So obviously that's a legacy that he is very proud of.

RUBENSTEIN: Okay.

Well, thank you very much Peter and Susan for a very interesting conversation and a book I really enjoyed reading.

BAKER: Thank you, David.

So great talking with you.

You're terrific.

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