Happy Birthday, Secretary Baker
Introducing From David’s Desk, a newsletter penned by Carlyle Co-Founder and Co-Chairman David M. Rubenstein and other leaders across our firm. Each edition provides insights on public policy, geopolitics, and other topics in and around Washington, DC. Discover past editions on the series' webpage.
I first came to Washington in June of 1975 to serve on the US Senate staff as chief counsel to a Senate subcommittee, and like many who come to Washington to serve in government—have never really left. I am now approaching a half-century in our nation's capital and have seen up close just about everything that one can see in government: great decisions and terrible decisions, courageous decisions and cowardly decisions, extraordinarily talented public servants and somewhat incompetent public servants, honest decisionmakers and borderline corrupt decisionmakers, humble public servants and arrogant public servants.
And I have seen up close, through good fortune, a number of public servants whom I greatly admired, initially from afar, and then admired even more as I came to know them better.
One such person, who I regard as about the most competent and impressive public servant I have ever met, is going to turn 95 years old on Monday—James A. Baker III, Under Secretary of Commerce under President Ford, White House Chief of Staff and Secretary of the Treasury under President Reagan, Secretary of State and White House Chief of Staff under President George H.W. Bush, and manager of five presidential campaigns. In all these roles, I admired James Baker from afar; that was despite the fact that in two of those presidential campaigns, he was on the opposite side of my candidate, then-Governor Carter in 1976 and President Carter in 1980.
In his governmental and political roles, I did not know James Baker. I was a lowly campaign staffer in 1976, a junior White House aide in 1980, and then not involved in government or politics after Carter's losing campaign in 1980.
But I came to know James Baker in the fall of 1992, after his best friend and the man for whom he worked so tirelessly and competently, George H. W. Bush, lost the presidential election to Bill Clinton.
I had conceived of and started Carlyle with several great partners in 1987. Two years later, after the Reagan Administration ended, Frank Carlucci, Reagan's Secretary of Defense, joined Carlyle, and I could see how he helped put us on the map with his network of contacts and visibility. I thought a similar, and perhaps even more visible former public servant, like James Baker, could do the same for the firm—not by contacting the US government (then controlled by President Clinton), but by being someone our investors around the world might want to hear from regarding global and political affairs. (While Carlyle may have pioneered the idea of having high-profile former government officials speak to private equity investors, a great many of our competitors used a similar technique—either by bringing these kind of former government officials into their firms or having them speak at their investment conferences.)
Why did we and others do this?
Since the late 19th century, the United States has been the world's largest economy with the most important financial and investment markets. It later became the most powerful military and geopolitical power, home of the greatest technology innovations, and the center of much of the world's most significant cultural influences. Everyone around the world seems highly interested in what is going on in the United States—especially with the US government and political events. Thus, speakers who can talk knowledgeably about these subjects are in great demand.
Figuring that out was the easy part. Getting James Baker to want to join a firm that was relatively small (we only had a small $100 million buyout fund then) was not an easy task. But I thought, why not try. So I asked a few friends if they could get me a meeting with James Baker, who was then working out of the White House Chief of Staff's office. After several weeks, I finally managed to get such a meeting, went in to see the great man, and explained that we were building a private equity firm in Washington and would like him to join. The idea that the firm would in time be global and become one of the largest such firms was not mentioned; it did not seem credible to make such claims five years into our existence and with only one small, dedicated fund and no international presence.
James Baker was quite polite in the meeting, but characteristically did not show his hand. So, I did not know his real reaction. He did say that he would probably join the very large Houston-based law firm, Baker Botts, that his great-grandfather had started, but he had not decided much else at the time. I suspected he would write a book, go on the speaking circuit, and maybe consider a run for president in 1996.
I later learned that James Baker's close advisor, former White House Office of Management and Budget Director Richard Darman, advised Baker not to join this small startup firm. That was not surprising, for we were tiny then, and no one outside of the United States had heard of us (few in the US had either). But ultimately, I managed to get a meeting with Darman and convinced him that it would not hurt Baker's reputation to join us. Darman ultimately agreed and actually asked to join our firm himself. And he did, to our good fortune.
Baker joined Carlyle in early 1993 and was a partner in our firm for nearly fifteen years. The firm grew considerably during that time, and he was quite pleased that he had joined. During those years, I traveled the world with Secretary Baker—across Europe, the Middle East, and Asia—and we developed a close relationship. I could see up close how he had been so successful in his government and political service. He was very smart, extremely well organized, always prepared, a skilled negotiator (always thinking about how to give something to the other side to make a deal possible), friendly with a great knack for telling jokes and using humor, and quite strategic in how he assessed any problem. He was also a pleasure to travel with—his repertoire of great stories about government experiences and prominent individuals was limitless.
I did not actually have much in common with Secretary Baker. He had been a Marine; I was not. He came from a prominent and reasonably wealthy Texas family; I certainly did not. He was an accomplished tennis player; I clearly was not. He was a skilled and dedicated hunter; I was absolutely not. And he was a proud Texan; I was not.
All that said, I seemed to bond with this extraordinary man, and relished traveling the world with James Baker, where he typically made speeches or met with government officials to explain what was going on in the United States, and to learn more about what was occurring in the host country. Everywhere we went, he was highly respected and treated almost like royalty.
But those travels were not what will be remembered about James Baker's great service to his country. It was that unmatched service that everyone so admired—and that I had a chance to see up close—which helped explain both his success and the universal admiration others had for him.
To review some of the highlights of that service:
James Baker had been a successful corporate lawyer in Houston with no government experience. He came to Washington as Under Secretary of Commerce, a position that his friend George Bush helped him secure. At that time, President Ford was in a difficult fight for the nomination of the party, with Ronald Reagan, the former Governor of California, who was doing well in a party that had moved to the right in recent years. The Secretary of Commerce, Rogers Morton, left that position and got involved with Ford's re-election campaign. But before doing so, he had observed Baker's skills and ultimately recommended that Baker be asked to lead the effort to secure the delegates Ford needed for the nomination. Although Baker had virtually no national political experience, he dove into the job and rescued a delegate hunt that was going in Reagan's favor. Without Baker's skills, it is likely that Reagan might have actually won the nomination, for Reagan was a strong campaigner, and Ford was stuck in the White House while inflation was rising, and the pardon of Nixon was still hurting Ford, even among Republican voters.
But in large part because of Baker's relentless and effective hunt for Republican delegates, Ford ultimately did get the nomination. Shortly thereafter, Ford asked Baker to run the general election campaign—not an enviable assignment as Ford was down 33 points when the general election campaign began.
That gap was probably too much for any campaign manager to overcome, especially in light of some problems that Ford encountered: Reagan did not campaign for Ford as much as he hoped and expected, inflation was continuing at a very high rate, Ford was unwilling to commit to dismissing his unpopular Secretary of State Henry Kissinger if elected, Ford made a major blunder in one of the debates when saying that Poland was not dominated by the Soviet Union, the Democrats were unusually united in their campaign, and the Nixon pardon still lingered.
Despite all of this, Ford lost by only two points in the popular vote and the Electoral College was the closest it had been since 1916. Had Ford won Wisconsin and Ohio—both of which he lost narrowly—he would have been elected. Clearly, Baker had done a heroic job of turning the campaign around.
But unlike horseshoes, getting close in elections is not enough. So, James Baker returned to Houston and ran for Attorney General of Texas. And in a rare professional setback, Baker lost the election to the Democratic candidate. That might have been the end of Baker's public career.
But George H.W. Bush asked Baker to manage his campaign for the 1980 Republican nomination, which was a longshot from the start. While Bush had been Director of the CIA and the US Representative in China (the United States had not recognized mainland China, and thus did not have an official ambassador there), he lost two Senate elections in Texas and had never won any statewide office in Texas or anywhere else. It was said that his base was his Christmas card list.
But Baker took on the assignment, managed to help Bush win the Iowa caucuses against the heavily favored Reagan, and managed to get Bush into a second-place finish in the fight for the nomination—certainly more than had been expected at the outset. Then lightning struck when those who had been close to Reagan would not run as his vice-presidential pick, and Reagan ultimately picked Bush.
Baker was given the assignment by Reagan of negotiating any debates that might be held with Carter and then preparing him for the debate. In the end, Baker negotiated one debate with Carter, a week before the election. Reagan won that debate, and there was simply no time for Carter to turn around the campaign at that point. Reagan won by a landslide.
And then came the big surprise. Reagan asked James Baker to serve as his White House Chief of Staff, a position that many thought would go to Ed Meese, who had been Reagan’s Chief of Staff when he served as Governor of California. But Reagan (and his wife) had come to feel that James Baker was extremely competent, smart, polished, knowledgeable about Washington, and that he could handle the position much better than Meese or others who had been close to Reagan over the years. Baker was surprised to have been asked, for he had run both Ford's campaign against Reagan in 1976, as well as Bush's campaign against Reagan in 1980. (Many of Reagan's die-hard conservative supporters thought James Baker was too moderate, and that concern was a constant challenge for Baker as chief of staff).
Baker ultimately worked out a power sharing arrangement with Meese and Michael Deaver (who had handled public relations for the Reagans and was especially close to Nancy Reagan) and began a four-year tour of duty as Chief of Staff. By the end of Reagan’s first presidential term, Baker was seen as the gold standard for White House chiefs of staff. That standard exists to this day, an impressive feat given that individuals usually last a little more than two years in the role. (President Trump, for example, had four chiefs of staff in his first term.)
As a result of Baker's deft management of White House staff, and his increasingly close relationship with both President Regan and Mrs. Reagan, Reagan’s first term as president was considered quite successful, as Reagan was able to get many of his major legislative initiatives through Congress, including his signature tax cuts and defense spending increases.
As a result of Reagan's increasingly high regard for Baker, Reagan asked him to lead his re-election campaign against former Vice President Mondale. Reagan, of course, was re-elected, winning 49 states and losing only Mondale's native Minnesota.
In Reagan's second term, Baker swapped positions with Donald Regan (the former CEO of Merrill Lynch) and was nominated as Secretary of the Treasury. Once again, James Baker did an outstanding job by all accounts, widely respected on Wall Street and Capitol Hill. Among his accomplishments was the historic 1985 Plaza Accord, which reset currency values and set the stage for a continued strong US economy.
By the end of 1987, Vice President George H.W. Bush decided that he would again seek the Republican nomination for president, and asked Baker to lead his campaign. And while there were some in the party who wanted a more conservative, Reagan-like figure, James Baker helped Bush get the nomination and win the general election against Governor Michael Dukakis of Massachusetts.
Once elected, one of President Bush's first announcements was that he would nominate James Baker to be Secretary of State. Quickly confirmed, Baker became a dominant figure in international relations during Bush’s term. For instance, when Saddam Hussein invaded Kuwait, Secretary Baker successfully secured both international support for a military effort to eject Saddam Hussein from Kuwait and raised the funds for that military action from more than thirty nations. And, of course, the war was won quickly by the coalition forces that removed Iraqi forces from Kuwait.
As Secretary, James Baker developed a close relationship with the Soviet Minister of Foreign Affairs, Eduard Shevardnadze, one that helped facilitate a peaceful ending of the Cold War and, in time, a successful re-unification of Germany.
When Bush ran for re-election, James Baker initially remained Secretary of State, but ultimately returned to his former position as White House Chief of Staff at the President’s request—an act that President Bush thought would turn around his floundering re-election campaign against Arkansas Governor Bill Clinton and Independent Ross Perot. That effort did not succeed—President Bush's failure to keep his pledge of "No New Taxes" and the sluggish economy, plus the need to compete against opponents from both the left, Clinton, and the right, Perot, proved too much of a burden for even James Baker.
In time, Baker moved back to Houston and started the Baker Institute at Rice University, which has become a leading global public policy think tank and forum.
Leading up to the 1996 presidential election, Secretary Baker, because of his strong public and international reputation for competence, was importuned to consider a run for the Republican nomination for president. But Secretary Baker ultimately decided not to pursue that option, to the dismay of more than a few in his party.
In the ensuing years, Secretary Baker wrote two well-received books about his career in government and politics— The Politics of Diplomacy and Work Hard, Study... And Keep Out of Politics! And he co-led, with Lee Hamilton, a Congressional commission to develop recommendations for exiting the military from Iraq (which ultimately influenced the wind-down of that effort).
As Secretary Baker prepares to celebrate his 95th birthday, I want to thank him for his friendship, support, and great service to our country. The United States would be well served if we could find a few more individuals of James Baker's skill who are willing and able to serve our nation.
I should add that Secretary Baker was helped immeasurably in his government life—and his family life—by his wife of 52 years, Susan, whom Secretary Baker married several years after his first wife, Mary Stuart, died of breast cancer at the age of 38 in 1970, leaving him with four young boys to raise. As a combined family, the Bakers raised eight children and had seventeen grandchildren.
For those who want to learn more about James Baker, there is no better biography than the 2020 book The Man Who Ran Washington: The Life and Times of James A. Baker III by Peter Baker and Susan Glasser.