Playing for the Edge

By Michael Kramer

"Those are armadillo tracks," says Jim Baker. "And that's a coyote turd."

"Where?"

A stream of well-chewed Red Man tobacco -- a replacement for his three-pack- a-day cigarette habit -- arcs expertly toward a barely visible target about four feet away. "Right there," he says. "Bull's-eye." It is the last day of 1988. In three weeks James Addison Baker III will become America's next Secretary of State.

Baker and a companion are turkey hunting on 1,366 acres of Texas scrubland about 50 miles south of San Antonio, a wild, almost barren part of the U.S. where it is easy to believe that due process is still a bullet. "I call it the Rock Pile Ranch," says Baker, "and that's about all that's on it. Nothing else but some water wells and turkey feeders. Coming here is the closest I get to therapy. I'm not really into material things, but land, well, they're not making any more of it."

"There, over there," says Baker. "That's a hen feather. It's easy to tell hens from gobblers. The gobblers are blacker and have beards. You need any toilet paper, let me know," he says, carefully producing about a dozen neatly folded sheets. "I never come out here without it. Amazing, isn't it, a real challenge."

"Toilet paper."

"No. The Middle East. You think we'll ever be able to get a peace agreement over there?"

"You see that?" says Baker, shifting again. "That's a hog wallow. They love to get down and dirty in it. Beautiful here, isn't it? I bet the contras would love it."

A few more steps, and Baker sees "something promising." With a shotgun cradled in his arm, he bends. Then very carefully, so as not to destroy the evidence, Baker fondles what he confidently identifies as "some very fresh" turkey droppings. "From this morning," he says. "They've been this way not very long ago. Walk quietly, and keep your eyes peeled. It's just like every other game. You master it by creating an edge."

Patience, says Baker. That's how you get a leg up hunting turkeys. And that too, he likes to say, is how you become successful at anything, in or out of politics.

"You know how he kills turkeys?" Barney McHenry, one of Baker's oldest friends, had said. "He pays good money to have someone load his feeders with , corn so he can lure them in. Then he shoots them while they're standing on the ground eating. Some sport."

"Wrong," says Baker. "The thing is getting them in. They're smart as hell. Their eyesight and hearing are incredible, about ten times better than a human's. The trick is in getting them where you want them, on your terms. Then you control the situation, not them. You have the options. Pull the trigger or don't. It doesn't matter once you've got them where you want them. The important thing is knowing that it's in your hands, that you can do whatever you determine is in your interest to do. I don't know, though," he adds after a few seconds.

"You mean we might spook them or get to the feeders after they're gone?"

"No," says Baker, flashing a brief, fleeting smile. "I mean Israel. Because there's now a dialogue with Arafat, there may be many more options open in the future. But creating something productive when Israel is divided internally is going to be real tough. Who knows?

"See those sardine cans?" says Baker suddenly. "The illegals have been by. They come through here and at other spots on their way in. If we don't get a handle on Third World debt, we'll be overrun by Mexicans coming here to work. It's got to be one of our main priorities . . . Bill Bradley and I disagree about how to deal with the debt problem. He wants to force the banks to restructure debt. I say that's probably unconstitutional, and even if it isn't, the only way we can do things like that is through voluntary negotiation. But Bradley and I are both convinced the way out involves growth. Nicky ((Brady, the Treasury Secretary)) will get a handle on it."

It goes on like this for two days -- informed, stream-of-consciousness musings on world affairs and turkey behavior. This is Baker's second hunting tour of the week. The first was in the company of his "pal," George Bush. "We only got 17 quail," says Baker. "Mostly on account of the dry weather. The quail haven't been reproducing in their normal numbers. And of course you have to factor in that the President-elect is, how shall I put it, an erratic shot." "It was good for them to do so poorly," says Baker's wife Susan later. "They're on top of the world now. It was good for their humility."

At one of the turkey blinds he has fashioned of logs and brush, Baker settles in to wait. He leans against a persimmon tree, and with as little motion as possible he reads and turns the pages of a State Department briefing . book stamped SECRET. Methodically, Baker underlines almost every sentence. "It's how I learn," he explains. "That and taking almost verbatim notes when someone is briefing me. 'Proper preparation prevents poor performance': one of my father's maxims. That's how you gain control. I'm on Africa now," he says. "We'll pick up and move when I get to the Near East."

At dinner that evening, at a ranch nearby, Baker faces a snap quiz. "What's the capital of Tanzania, Dad?" says one of his stepsons.

"Too easy," says Baker.

"Name the members of the European Community."

He ticks them off on his fingers.

"What's our position on European integration in '92?"

Baker hesitates. It is well known that the U.S. is not exactly thrilled by the prospect of "E.C. '92," but a guest is present. Slowly, with his official voice in gear, the Secretary-designate rehearses the lines he will shortly repeat to the Senate during his confirmation hearings. "We've got to make sure Europe is open to all," he says. "If that means aggressively enforcing our own trade laws, so be it. I hope it doesn't come to that. It's going to take some skilled diplomacy to get the edge on that one. Tell you the truth, I can't wait to get my hands on this stuff."

But not ahead of schedule. Despite a net worth estimated at $4 million, Baker is notoriously frugal. When he went to Washington to become Ronald Reagan's chief of staff, Baker and his wife lived briefly in two rooms without a phone at a Christian Fellowship house. His Foxhall Road residence wasn't ready, and the Bakers wanted to save "about $7,000 in hotel bills." Now, at the ranch, Baker says he is thinking of heading back to Washington a few hours early. "O.K.," says Susan, "but remember we got those supersaver fares, Jimmy. It'll cost extra." "Oh, right," says Baker. "Forget it. I'll go back as planned."

It is Jan. 27, and Baker is sitting in the seventh-floor Secretary's office at the State Department watching Bush conduct his first press conference as President. "Pull up your tie, George," says Baker affectionately to the TV screen. "And be careful with the F.M.L.N. question." But no one asks about the peace proposal offered by the leftist guerrilla group in El Salvador that calls itself the Farabundo Marti National Liberation Front, so Baker responds to an imagined query. He has changed course.

When the guerrillas' plan to participate in national elections first surfaced, the "Building," as the Foreign Service calls its Washington headquarters, rejected the scheme out of hand. "Wrong thing to do," said Baker, who immediately ordered a more welcoming response. Telegraphing a willingness to consider the F.M.L.N.'s proposal had a twofold purpose: first, to let U.S. Latin allies know that the Bush Administration is taking a fresh look at Central America. Second, to signal to congressional opponents of the Reagan policy that Bush will consider any new option, no matter the origin. "Getting the edge, in Central America especially," says Baker, "requires a bipartisan approach, and that requires our maintaining the moral high ground. Nothing is going to get accomplished down south without Congress being on board."

By this standard, "Baker is already a sure winner," says Connecticut Senator Christopher Dodd, a persistent critic of Reagan's Central America policy. "I was very impressed. That kind of quick work shows that Baker's sweet bipartisan talk during his confirmation hearings was more than rhetoric."

Despite Baker's irritation with State's initial position -- and in marked contrast to the flailing that has characterized the Administration's various proposals for bailing out the nation's savings and loans -- nothing about the change in Salvador policy was undertaken hysterically. To a person, those who have worked with Baker say he mistrusts solutions offered at the top of one's voice, and has no faith in those who offer them. He listens respectfully to all comers, as if each speaker is the age of reason's local representative.

Baker "runs a calm shop," says State Department counselor Robert Zoellick. "There's no nonsense. You state your views and support them, both as briefly and quietly as possible. Then you get out." Zoellick, who could have been White House domestic-affairs adviser, is one of a handful of Baker aides who turned down more visible posts elsewhere in the Administration. "The reason for that," says Margaret Tutwiler, who has been Baker's closest assistant for more than ten years, "is that ((Baker)) is loyal down as well as up. He seeks out strong-minded people and delegates considerable authority. In the end, he decides without agonizing and moves on. He doesn't postpone."

Unless postponement is tactically useful. Since the U.S. began discussions with the P.L.O. last December, Israel has heard little from the Administration's highest reaches. The result has been frantic maneuvering in Jerusalem, movement that may make the next step toward negotiations easier. Rather than react to an American agenda, Yitzhak Shamir's government is being forced to craft its own. "Sometimes," says Baker, "a pro-active policy is best advanced by doing nothing until the right time."

Or by reacting intelligently. The U.S. shift in the Middle East came only after Yasser Arafat finally accepted Israel's right to exist. "Once you're confronted with something someone else has put forward," says Baker, "the measure should be how you turn it to your advantage."

This goes to the heart of Baker's ideas for pursuing the opportunities created by Mikhail Gorbachev's seemingly sincere desire to reform the Soviet Union. Like Bush, Baker does not fear a resurgent Moscow. "If they really reform their economic system," he says, "they'll be more secure at home and thus less inclined to military adventurism abroad." Baker's only worry, it seems, is that Gorbachev's days may be numbered. But as long as Gorbachev retains control, Baker is determined to deal wherever he can.

An example of that determination can be gleaned from Baker's embryonic thinking about eliminating the allied embargo on "dual use" (civilian or military) technology sales to Moscow, a ban the allies imposed following the Soviet invasion of Afghanistan in 1979. Now that the Soviets are withdrawing, the Europeans are urging an end to the restrictions. Baker is aware that the proximate reason for the embargo will soon end, but rewarding the Soviets for ceasing activities they never should have begun seems less important to him than trading the embargo's end for further moderations in Moscow's behavior. Linking U.S. actions to future Soviet concessions is what the game is all about. "Give away something unilaterally without a quid pro quo?" says Baker. "No, sir."

Baker, of course, is not operating with a completely free hand. George Bush says he "loves the foreign policy aspects" of his job, and Bush, obviously, is the boss. But the two men have a unique relationship. "They are as close to being equals as any President and a subordinate have ever been," says writer Victor Gold, who has been close to both of them for two decades. Baker may not be Deputy President or Prime Minister, but at the very least, he is first among equals.

To say that Bush and Baker go way back only begins to describe their closeness. Bush brought Baker into politics and firmly believes he would not ^ have become President without him. Nevertheless, the President speaks of Baker as his brother -- his "younger brother," a diminution that signals a certain competitiveness. "It's not unjustified for him to think of me as his protege," says Baker. "But then you have to consider that I took off a lot of time and lost a lot of income working for him in the '80 campaign. That kind of squared the circle. And remember, when I got the chief of staff job with Reagan, that wasn't ((Bush's)) doing."

Baker walked an interesting line during the Reagan years. His first loyalty was to the President, but he saw that Bush was included and had meaningful tasks to perform. "There was tension, of course," says a Bush friend. "Baker ran Reagan's '84 campaign, and Bush had to take direction from him. That was when Bush was made to travel the low road, and it was obvious that he felt Baker was looking out for Reagan first. That was only proper, of course, but George didn't like it anyway."

On balance, Baker did more for Bush than any White House staffer has ever done for a Vice President -- but that was not necessarily enough. Shortly before Baker left the White House for the Treasury Department in 1985, he made certain that Bush was present at the crucial 9 a.m. meetings with Reagan. When Donald Regan replaced Baker, he figured that Bush's presence came with the territory. "Nobody suggested that to Baker," says a White House aide. "He just did it for his friend. But believe me, as soon as it started, George's first reaction was to wonder why Jimmy hadn't gotten him in there from the start."

No matter its mutually beneficial nature, the Bush-Baker relationship is complicated. But "not really competitive," says Susan Baker. "Jimmy is only really in competition with himself."

Bush and Baker first met in Houston more than 30 years ago. They were a fairly successful tennis duo at the posh Houston Country Club, and when Bush ran unsuccessfully for Congress, Baker's first wife, Mary Stuart, was an around-the-clock volunteer. Later, when Mary Stuart lay dying of cancer in 1970, George and Barbara Bush spent hours at the hospital. Says Vic Gold: "There is just no way to exaggerate the bond created during a crisis like that."

"To give me something to do after Mary Stuart's death," says Baker, "George got me involved in his '70 Senate campaign." "Yeah," says the President, "but it was more selfishness than therapy. I knew Jimmy would help tremendously."

Later, in 1975, Bush persuaded President Ford to name Baker Under Secretary of Commerce. It was then that Baker first learned how to play the inside game. Ford was locked in a struggle for the 1976 Republican presidential nomination with Ronald Reagan. From his perch at Commerce, Baker was trying to help with Southern supporters by persuading the President to take a hard line against textile imports from China. At the same time, Secretary of State Henry Kissinger wanted nothing to upset the Chinese.

Ford was scheduled to speak to a group of textile manufacturers in San Francisco on March 26, 1976, and Baker talked him into indicating his willingness to get tough on Chinese textiles. Kissinger's deputies were aghast, and Baker suspected that the Secretary of State would call Air Force One to have the offensive language deleted from the President's speech. Baker arranged to be notified if Kissinger tried such a ploy. When word came, Baker called the plane too. Arguing again for the President's political interests against China's hurt feelings, Baker had the lines reinserted. "A few weeks later," Baker says, "when I met Henry for the first time in a State Department receiving line, he greeted me with one of those looks of his and said, 'Ah, so you are Textile Baker.' "

Baker soon took over management of Ford's losing campaign and brought the President within an eyelash of beating Jimmy Carter. Four years later, the Reaganites tried to recruit Baker for the '80 campaign. But Bush was running, and Baker never hesitated to dance with the man who brung him. Moreover, he ensured Bush's selection as Reagan's Vice President, which wasn't easy. "What I'll admit to, but George never will," said Baker in 1981, "is that the Veep thing was always the fallback. It was always in my mind. That's why, at every opportunity, I had him cool his rhetoric about Reagan."

The key moment came in May of 1980. Bush was charging ahead without a mathematical chance of overtaking Reagan. With the candidate on the road, Baker virtually yanked him from the race by confirming to reporters that the Bush effort in California was a scam. Bush was furious and convened a senior staff meeting in Houston. The candidate, like all candidates, could not have cared less about the math. He wanted to continue. Baker had a different concern. He knew Reagan would be "terminally ticked off" if Bush pressed ahead into California, Reagan's home state.

Gold notes something else about the Baker method. "Bush is not manageable in the ordinary sense," says Gold. "You have to be extremely tactful to get him to go along with something. He likes his prerogatives. So down in Houston, Jimmy had a bunch of us there who agreed with him about George's dropping out. He didn't need us there, but spreading the burden was important for Jimmy's continuing relationship with George."

After the pullout, and not for the first time, Bush grumbled, "Yeah, Jimmy was right. Why is Jimmy always right?" Bush's pique underscored a lesson Baker has never forgotten: a campaign manager should say no to a candidate only so often. Unfortunately for Baker, he has always been the only member of Bush's inner circle capable of successfully standing up to the boss. (For the record, the President demurs. "There are others who can," says Bush, "but they don't.")

In 1988 it was Baker who regularly needed to keep Bush on board with the fall campaign's attack strategy. By all accounts, the key to his success with Bush was a smooth manner. At every turn, Baker played the high-priced corporate lawyer who subtly guides his client to "choose" the option the lawyer intended from the start. "Everything was couched in the most mild way so as to let Bush make the final decisions," says one of the campaign's senior advisers. "It was always 'Hey, Bushie, the gang here thinks you ought to do thus and such -- but only if it conforms to your own thinking.' "

Even so, Baker didn't win them all. Besides selecting Dan Quayle, which appears to have been a Bush solo, the candidate often free-lanced by adopting a nonconfrontational technique. "Baker would call him on the plane and get him to change some line or another," says a Baker associate. "Bush would say, 'O.K., Jimmy, right,' and then go and do what he wanted to do anyway."

Sometimes, when Baker tired of conveying the handlers' no yet again, he flat-out rebelled. "Once, when Bush thought he could go the kinder-gentler route exclusively, we asked Jimmy to read him the riot act again," says Roger Ailes, Bush's media adviser. "That was one of the few times I've ever seen him blow up. He said, 'You call him yourselves. You're not the ones who have to carry that message and have him say, 'If you're so smart, Jimmy, how come I'm the one who's Vice President?' "

One of the '88 campaign's most important operations -- the debates with , Dukakis -- reflects Baker's acumen. The first goal, as usual, was getting the edge. Paul Brountas, a prominent Boston attorney and the Dukakis campaign's chairman, was the Democrats' lead debate negotiator. Brountas doesn't have a particularly large ego, but complimenting him can be like throwing gasoline on a fire. "Baker realized he could woo Brountas, and did so masterfully," says Thomas Donilon, then a Dukakis aide. "We were the kids, Baker told Paul, while he and Brountas were megalawyers with a code of honor that transcended the nastiness of mere politics. Paul ate it up."

Then Baker convinced Brountas that Bush was perfectly happy not to have any debates at all -- which was never the G.O.P.'s real position. "Once Paul bought that," says Donilon, "the concessions flowed. Any chance we may have had to have Bush and Dukakis actually question each other without a panel was gone." Recalling how he snookered Brountas, Baker smiles. "Let's just say that whatever edge they thought they had, they convinced themselves they didn't have it."

Incredibly, Brountas still believes Baker is a straight shooter. "Baker's absolutely the best I've ever seen at not making enemies," says Robert Strauss, the Democratic elder, who is one of Baker's closest personal friends. "It's not for nothing that he's called 'the Velvet Hammer.' " Of those Baker has crossed, few are willing to say anything negative on the record. One who does is Hugh Gregg, the former New Hampshire Governor who ran that state's operation for Bush in 1980. "Jimmy is a consummate pragmatist and a very tough pol," says Gregg. "But he'll stomp on anyone in his way, even a friend. Probe a bit, and you'll find that he doesn't really have much compassion for people."

Baker is a scion of one of Houston's most famous families. His great- grandfather and grandfather were prominent lawyers and financiers. His father, called "the Warden" by Jimmy's friends, was a strict disciplinarian. Baker recalls frequent whippings, and his father often awakened him by throwing cold water in his face. "Gets you up real fast," says the Secretary of State.

Following his father, Baker attended the Hill School and Princeton. No one recalls him being a grind, and everyone remembers a fair amount of hell raising. But Baker did manage a 150-page Princeton history-department thesis glorifying the career of Ernest Bevin, a British Labor Party Foreign Secretary who was as thick with his boss, Clement Attlee, as Baker is with Bush. Of the many attributes that intrigued Baker about Bevin, he most admired those that others now see in him. Bevin was an "expert negotiator," wrote Baker in 1952. "((He)) never became lost in the idealistic. He was always very practical." What Bevin always sought, said Baker, was "concrete advantage."

After Princeton, Baker married, served two years in the Marine Corps and then went home to Texas for law school. His father insisted that he join an undergraduate fraternity and Baker complied. The hazing, which included carrying a dead fish around his neck for a week, was humiliating for a father and former Marine lieutenant. "It's absolutely incredible that he did that," says Susan Baker. "I would have said, 'See you later, Pop.' "

Even Baker admits that he has not been "exactly the best father" to his own children. The portrait that Jim and Susan Baker paint is of a man obsessed with his job -- an "efficient workaholic," as Baker describes himself. "The idea was to make your mark," he says. "Don't indulge in a lot of introspection. Just get on with it." Time with his family remains scarce. "I'd like more giggle time with him," says Susan. "I'd give anything for a month off with him. But that's not in the cards. And yes, that's a good part of why I've become so involved in my own things." Susan Baker is an advocate for the homeless and a partner in the crusade against sexually explicit rock lyrics. She speaks often of the power of prayer: the secret, she has said, "is to integrate prayer into your life. It's not quote-unquote religious, and there's nothing pious about it. It's more like, 'Help, God, I'm having a fit.' "

Susan Baker is not the only one in the family who gets down. "Jimmy gets depressed whenever he faces the prospect of having to return to practicing law," says Phil Uzielli, Baker's closest friend from his Princeton days. "He craves the action. He was down for a brief moment this year before Bush throttled Dukakis in the second debate. I remember him saying, 'Right now, I don't care who wins. I just want the thing to be over. I guess I may be going back to the law after all.' "

Reagan saved him from the law in 1980 by offering him a position as "senior adviser" in his campaign. "What kind of a title is that?" said Baker at the time. "It's nothing." But he took it, and that was all the edge he needed. Into second-rate company, Baker brought a first-rate mind. He quickly became integral to the Reagan operation, and immediately after the election was named White House chief of staff.

Reagan's longtime pal Ed Meese still needed work, so a troika was born. Baker, Meese and Michael Deaver were each granted equal access to the President. Only gradually did Baker aggregate power to himself. Along the way, though, he gained something less desirable: deep mistrust from right-wing conservatives. They were most enraged by Baker's efforts to increase revenues and cut defense spending to pare the ballooning budget deficit. Reagan didn't much care for Baker's view either. At one point, as the fiscal 1983 budget was being crafted, Baker urged Reagan merely to slow defense spending. In a pivotal confrontation, the President removed his glasses and glowered at his aide. "If that's what you believe," said Reagan, "then what the hell are you doing here?"

An ideologue might have fled. A pragmatist and political junkie could only hang in and seek a change in venue. Shortly after Reagan's re-election in 1984, Treasury Secretary Don Regan suggested that he and Baker swap jobs, a move that proved disastrous for the White House but enhanced Baker's reputation.

Reagan has called Regan's tenure as chief of staff a major mistake, while Baker went on to three major triumphs. The tax-reform act, the Plaza accord on the dollar, and the U.S.-Canada trade agreement were all wily combinations of indirection and hardball politics.

Don Regan, while he was still Treasury Secretary in 1984, formulated the Administration's initial tax-reform scheme, "Treasury I," which Baker concluded had "absolutely no chance of flying." After swapping jobs with Regan, Baker crafted his own version, "Treasury II," incorporating numerous deals cut between him and various members of Congress. Regan's White House staff predicted its demise and told the President he should retreat. "Regan's actual motive for that conclusion was jealousy," says Lawrence F. O'Brien III, a Washington attorney in charge of private-sector lobbying for the bill. "I think he saw Baker as being able to do something that he couldn't, so he set out to scuttle Treasury II."

To turn the President around and keep the heat on Congress, Baker pulled out all the stops. Corporate chairmen friendly with the President were enlisted to bend his ear. And, as he had before, Baker skillfully used Nancy Reagan to influence her husband. He reminded her of past presidential statements consistent with the tax bill, and she, in turn, threw the President's own words back in his face. The tax-reform act that was finally passed in 1986 had Baker's fingerprints all over it -- but his hand was well hidden.

The September 1985 Plaza agreement, which led to the dollar's orderly decline, required an even defter touch and near total secrecy. When Baker took over Treasury, Reagan was still saying that "a strong dollar means a strong America." As with some other Reagan bromides, this one was outdated and dangerous. The nation's overvalued currency was strangling American exports, boosting the trade deficit and encouraging cries for protectionism. The dollar-devaluation strategy was necessary because Baker had got nowhere with Reagan on the budget deficit. "I had to use the tools actually available," recalls Baker, "and that meant monetary policy."

The world -- and most of the Reagan Administration -- became aware of Baker's scheme only when he convened the conference of finance ministers at the Plaza Hotel in New York. Reagan knew of the meeting in advance, of course, but was apprised of the full scope of Baker's plan only two days beforehand. Devaluation "was sold to the President as necessary to stem the protectionist tide in Congress," says a Baker intimate. "It was sold to Don Regan as being consistent with an earlier call he had made for an international conference to discuss exchange rates. To this day, I don't think Don understood what we were about to do. ((Then Federal Reserve Chairman Paul)) Volcker was managed because we had carefully split his board. Paul had no alternative but to go along."

The finance ministers too were roundly manipulated. "At first," says one of those subjected to Baker's machinations, "he split us just like he split the Fed. He began by using the U.S. and Japan against West Germany. Then he combined those three to bring along the whole Group of Five ((including Britain and France)). He bluffed us constantly and regularly threatened to pack up and go home. He was particularly adept at never rebutting those who insisted on dismissing what we were doing as irrelevant. Thus the supply- siders were never able to counter him. It all seemed so mellow."

Most experts thought it did not work. The dollar fell without creating a recession, but America's trade deficit has barely declined. "Come on," argues Baker, whose tolerance for criticism is not his strongest suit. "Can you imagine where we'd be today on the trade deficit if the Plaza process hadn't begun?"

The real legacy of the exchange-rate intervention Baker began is the process itself, a model for the kind of international cooperation the U.S. must replicate if it hopes to retain its leading role in a multipolar world. "The start in building a multilateral system," says Richard Darman, "is a story line that can continue for decades if it is properly nurtured."

Countless problems could derail Baker at State. Third World debt, coming to terms with Marxism in Central America, Europe's desire to rush headlong into detente with Moscow, the flips that will be required to get Japan and the NATO nations to share more of the West's military and financial burdens -- these are only four "small" items on Baker's plate. But above all is the matter of America's role as U.S. hegemony comes to an end. Constraints on spending at home will limit American ability to project influence abroad at a time when U.S. dependence on the international economy has never been greater.

Baker is uncomfortable with what he and Bush call the "vision thing." When he was chief of staff, Baker once said he didn't need to have a vision "because the guy down the hall ((Reagan)) has one. I'm more interested in the game than in philosophy." With the new guy in the Oval Office equally at sea, the matter may fall to Baker by default.

In a little-noticed 1986 speech to the Chicago Economic Club, Baker began articulating a new view, an offering that recognized the primacy of economic policy in the late 20th century. "Our leadership has taken a form different from that of recent historical experience," he said. "The recent model has been one of national dominance in an international economic system -- as represented by the United States in the aftermath of World War II or by Britain in the latter half of the 19th century. Our new leadership is more in the manner of an architect and builder, patiently and tenaciously pursuing a vision of economic growth and prosperity, trying to persuade others what may be accomplished while contributing our fair share."

The loaded word, of course, was "persuade," a recognition that the days of dictation are over. But simply having a coherent world view or merely recognizing a new reality is obviously insufficient. The hard part is getting from here to there. "And that is why Baker is so well suited to the era," % says Pete Peterson, an investment banker who served as Richard Nixon's Secretary of Commerce. "Jim plays the cards he's been dealt as well as anyone. In the '90s his hand will consist of very different cards from those of his predecessors."

If Baker succeeds -- if, with American primacy intact, he can manage the transition to a new era -- he may be ready for the next step. "He's got the ace of diamonds of jobs now," says Preston Moore, a Baker cousin and close friend. "The ace of spades is still out there to get. One thing's for certain: Jimmy Baker won't voluntarily go back to drafting wills if he's still got his wits about him."

NBC's Andrea Mitchell corners Baker in the Capitol Rotunda shortly before George Bush is to be sworn in as President. She wonders if Baker might himself someday be taking the oath from the Chief Justice. Baker's smile is tight and forced. "Absolutely not," he says.

"I remember one time not long ago when a group of us were sitting around and someone said again that Jimmy is the one who should be President, not George," says Phil Uzielli. "He loved it, and he let the talk go on a bit before shutting it down. If George weren't set on running, said Jimmy, well, that would be a different thing. But someday, maybe."

Someday almost assuredly. "Jimmy has a tremendous ambition and drive to reach the top," says Susan Baker. "But the presidency is the last thing in his mind right now. We don't spend a lot of time strategizing about it. Right now, he's got to be the best Secretary of State he can. The rest may come from that later."

How exactly? Baker's friends have considered probably every route. Most dismiss a return to Texas and another run for elective office. (Baker lost a 1978 race for Texas attorney general.) "That might get him the political base he needs," says Baker's son Jamie. "But it's risky. There's no reason he couldn't leave State near the end of Bush's tenure and work it from the outside."

Then there is the "Dump Quayle" strategy. "If Jerry Ford could dump Nelson Rockefeller," says a Baker friend, "why couldn't Bush dump Quayle?" Bush could, of course, but then there would be the residence problem. With both candidates from Texas, a Bush-Baker ticket might be required by the Constitution to forfeit that state's electoral votes. "And besides that," says Robert Strauss, "folks would probably find the whole thing too cute."

In fact, the Bush campaign made a similar determination last year when Robert Teeter explored the possibility of Bush's claiming Maine as his residence to run with Baker in 1988. Both Bush and Baker were reportedly intrigued, but the too-cute reasoning prevailed. And Bush has told TIME he won't change residences now that he is in the White House.

Which leaves 1996. "That could work," says Strauss. "Look, obviously being President is on his mind. He's that smart and that shrewd and that ambitious. He knows there's really only one job in Washington worth having."

"I think he first knew for sure that he could handle the job when he was at Treasury," says Jamie Baker. "Before that, he had very successfully dealt with all manner of politicians at home. Then he prevailed in a complex negotiation with some very savvy foreigners in a field he knew not too much about. To relate it to basketball, I think that's when Dad, in his own mind, realized for certain that he could play above the rim."

Jiggling his key ring, Baker is beside himself. "Dammit," he says. "Now get this down exactly as I say it. I am not interested in being President. I don't want to be President. For God's sake, in 1996 I will be 66 years old."

"That's right," says Jamie. "He's got the arithmetic right. He'll be 66 in eight years -- three years younger than Ronald Reagan was when he became President."