tv The David Rubenstein Show Peer to Peer Conversations Bloomberg June 3, 2018 2:30pm-3:00pm EDT
david: george herbert walker bush asked you to help him in his campaign. james: i said, george, that's a great idea. except i don't know anything about politics. and number two, i'm a democrat. david: the board loses narrowly to carter. james: that's because you were in the white house advising. [laughter] david: was it difficult to prepare reagan? james: the red light goes on, and he is perfect. david: as secretary of state, your job was to go around and get the coalition put together. james: it was a textbook example of the way to fight a war. david: what was the reason you were so successful? james: lucky. >> will you fix your tie please? david: well, people wouldn't recognize me if my tie was fixed, but ok. i'll just leave it this way. all right. ♪
david: i don't consider myself a journalist. and nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job running a private equity firm. how do you define leadership? what is it that makes somebody tick? ♪ david: do you miss the days when everything you did was in the front pages, everything you did was making world policy, or are you quite happy with what you are doing now? james: i only miss having not been reelected in 1992. because i think we were getting a lot of things done. and i think we could have continued doing some things. but i have to tell you, life after politics is pretty damn good. [laughter] james: you are your own boss,
you set your own schedule to you -- schedule, you do what you want to do. and there is a lot to be said for that. david: let's talk about your career and how you came to be in the positions that you held. you are a native of houston. is that correct? james: right. david: your family had been here for quite some time. james: 1872. david: to be precise. james: that's quite some time. david: and when you were growing up, did you know you wanted to be secretary of state? secretary of treasury, chief of staff? james: no, no. i was raised by a family that didn't really participate in politics. politics was sort of a dirty business. and really good lawyers did not involve themselves in politics. i had a grandfather whose mantra for the young lawyers coming to work for the family law firm was work hard, study, and stay out of politics. that is the reason why i use that title for my most recent book. so i was pretty much apolitical. david: were you a star athlete,
were you a student leader? what was your great interest? james: i was a reasonably decent athlete. i would not say i was a student leader. as a matter of fact, i almost flunked out of princeton university my freshman year because i had gone to a prep school in pennsylvania, which was very strict. we couldn't have dates, couldn't have girls there. so when i got to princeton and got all that freedom and i could go to new york, i didn't spend much time studying. [laughter] david: after you graduated from princeton, you went to the marines. james: that was a very maturing experience for me. and i love the marine corps. i love it to this day. as you know, there is no such thing as a former marine. david: no. james: when you are a marine, you are a marine. david: my father was in the marines, so i understand. after you finished the marines, you came to the university of texas law school. you did quite well. you are ready to join baker and botts. what happened?
james: they had a nepotism rule. but, i was hopeful. one day, my dad came home from work and he said, son, my firm is going to give some consideration to waiving the nepotism rule for you because you have got the grades. and you are the fourth james a. baker in a row that would practice there. he came home the next night and he said well, the firm decided not to waive the nepotism. [laughter] james: and i was very down about that. but as i have said to people in retrospect, it was the best thing that could have ever happened to me because if i had succeeded, it would have been because my dad was there. and if i had failed, people would say, what do you expect? he is only here because his dad is here. so it was a good thing for me that they did not want me to come there. david: growing up, your father was a tough taskmaster. as i remember, you said he had a certain set of principles about preparation. james: he kept telling me, son, a prior preparation prevents poor performance. he called it the five p's.
and it was -- again, it was a mantra that guided my life. i can probably say since we are here today at the baker institute, that i thought it might be the six p's. prior preparation prevents piss-poor performance. [laughter] david: ok, well, your father didn't say that. but this is your addition to the family mantra. [laughter] james: it is an amendment. david: you are practicing law, minding your own business, and you are playing tennis with someone named george herbert walker bush. james: right. david: and then all of a sudden, george herbert walker bush asked you at some point to help him in his campaign. james: right. david: and that is after your wife dies of breast cancer. james: that's correct. she died of breast cancer at the age of 38. barbara and george were the last non-family members to see her before she died. we were close, even then.
and george came to me and said, baker, you know, you need to take your mind off your grief and help me run for the senate. i look at him and i said well, george, that's a great idea, except for two things. number one, i don't know anything about politics. number two, i'm a democrat. [laughter] james: he said well, we can fix that latter problem. [laughter] james: and we did. and when i am talking to a room full of republicans, i say i have got religion, and when i am talking to a mixed crowd, i say i switched parties. so -- [laughter] david: you switched parties. you helped him in the 1970 election for the senate. james: i had been a little bit bitten by the political bug. not totally or completely. and they asked me to be state finance chairman of the republican party of texas. and i did that. david: you were offered a position to come to washington when president ford was president. james: jerry ford. that's right. david: you were offered the position of being deputy secretary of commerce.
and how did you quickly become somebody who is in charge of finding delegates for president ford in his race in 1970 against ronald reagan? james: first of all, the job of deputy secretary commerce, they usually try to find a business lawyer type. that is what i had been. george bush, i know, put in a good word for me. but the second tragedy struck after i had been at the commerce for six months. the second tragedy that changed my life. and that was that jerry ford's delegate hunter in his campaign for the nomination against ronald reagan was killed in an automobile accident. and they needed a new delegate out there. i didn't know anything about delegate hunting. i found out about it. david: to remind people, in 1976, gerald ford was president, but he had never been elected. he was going to run for election, and his main opponent was ronald reagan. james: right.
david: and it came down to a very, very tight convention. your job was to get the delegates for president ford. avid: how did it go? james: that was the last truly contested national convention of either major political party. -- party in this country. and it went down -- it went right down to the last ballot. it was very tight. we were chasing a very small pool of uncommitted delegates, reagan was very strong, he almost knocked off an incumbent president. but we were able to prevail. we used, i will say, the full resources of the white house. i used to tell people that i've been to more state dinners than anyone in the world because as a delegate hunter for president ford, i used to bring uncommitted delegates to state dinners. and then i became secretary of state and had to go to every state dinner. which i -- [laughter] david: the election is carter's way ahead. and then he catches up toward
the end, ford comes back. they have debates. but ultimately, ford loses narrowly to carter. james: that is because you were in the white house advising. [laughter] david: well -- [laughter] david: that was later when he lost. [laughter] david: you have now managed the campaign that lost for president. what did you decide to do? did you decide to go back to texas? james: yes. i tell people every time we lose an election, i come back here. a lot of people stay up there. i do not want to do that. david: you decided to run for attorney general. james: well, i had been bitten by the political bug. because that convention was really close, very exciting. and by the way, we only lost that election to you guys by 10,000 votes. out of 81 million votes that had been cast. you turn 10,000 votes around and iowa and hawaii, ford would have been president, carter would have never been president.
i was bitten by the bug. i had a practiced law for 18 years, and i was coming back here and i said to myself, well, maybe you ought to try your hand at this political game. david: and while you were campaigning, you point out somebody came up to you and said, you look like jim baker. james: i had a gotten a lot of press time as ford's national chairman. a lot of tv time. and people used to recognize me. they couldn't really come up with a name. this guy one time did that. he said, anyone ever tell you you look like jim baker? i said yes, often. [laughter] james: and i thought boy, this is a big deal. and the guy said, doesn't it piss you off? [laughter] james: that is when i realized, david, i was not going to win that race. david: reagan wins the election, what did you think you would be offered, if anything? james: my name had been surfaced as a potential white house chief of staff. i said that is not possible. you don't go to somebody who is running two campaigns against you and make him your white house chief of staff. and guess what? i don't think it will ever happen again in american
david: in 1978, you got a call not too long after from your friend george bush and he says, guess what? i'm going to run for president. i want you to help manage my campaign. what did you say? james: i helped george bush because he was my close friend. david: ultimately, he did not get the nomination. james: reagan got it. david: i don't think you thought that george bush was going to be picked as the next president. james: i was in the suite with barbara and george and a few of our campaign staff. we thought it was all over. when walter cronkite comes out and he says, ford is considering
joining the ticket with reagan -- david: it turns out when walter cronkite uses the phrase a co-presidency, like ford it would be a president -- like ford would be a president with reagan, reagan got upset with that. he said, this will not work. then he openly called george bush. james: i took the call to it was -- i took the call. it was drew lewis was working for reagan. he said governor reagan would like to speak to ambassador bush. i handed him the phone. he said, yes, how are you, yes sir, he said yes, and the only question i think reagan asked him was, will you support my position on abortion? and ambassador bush said yes, sir i will. david: you were given a task by ronald reagan. to help in the debates? james: to help with the debates. help negotiate the debates and help prepare for the debates. david: was it difficult to prepare reagan for the debates? people were not confident he was a good debater. james: a lot of his close people didn't want him to debate. i wanted him to. his pollster i think wanted him to. i believe nancy wanted him to.
i always thought he was terrific. in front of the camera. the red light goes on, he's perfect. david: reagan wins the election. and wht do you think you will be offered, if anything? james: i don't think. i don't know. i had heard that my name had been surfaced as a potential white house chief of staff. i said, that's not possible. you don't go to somebody who is that who has run two campaigns -- who has run two campaigns against you and make him your white house chief of staff. and guess what? i don't think it will ever happen again in american politics. not the way we are going today, anyway. david: ronald reagan did offer you the job. james: he did. david: you became chief of staff of the white house. was it as much fun doing the job as it later is talking about it? james: the worst job in government. i tell everyone that. i tell the people who have been nominated for that job or appointed to the job, you have got the worst job in government. because you are right at the intersection of politics and policy.
for me, it was even worse because i was in interloper. -- i was an interloper. i was not a californian. they didn't give me credit for being a conservative. i wasn't a reaganite. and there were a lot of people that tried to take me out. but the gipper was always there for me. and so was his wife. and so was my neighbor and a whole host of other people. david: reagan was an amiable person. you found him to be quite easy to work for. it was said you had to give him a joke every day. he liked to hear a joke every day. and he would give you one every day. james: best joke teller you ever heard. i can't repeat it. [laughter] david: you became secretary of treasury. and during that time, among other things, became the most significant rewriting of the tax code we have had for 50 years or so. james: revenue neutral way. we didn't grow the deficit to do it. david: 1986 tax act.
how did you get that through? because congress was controlled by the democrats in those days. james: well, we worked -- president reagan was good about reaching across the aisle. and we worked with the democratic leadership in the house to make that happen. it wasn't easy. david: you got that done. and then your friend george herbert walker bush says he wants to run for president. reagan's two terms will be up. george bush is vice president. and he asks you to help him run his campaign. were you reluctant to leave as secretary of treasury to do that? james: i was going to do it. i was going to do it, if he asked me to. i didn't like the idea of having to get back into the grubby, the nitty-gritty of politics, leave the treasury's second ranking cabinet department. david: which is behind for quite a bit of the campaign. catches up. wins. then do you say, i'm ready to go back to houston? james: no, he knew i wanted to be secretary of state. david: he offered you that right
away. james: the next day. david: so as secretary of state, you had to deal with a number of problems. one of them was the invasion of kuwait by saddam hussein. your job was to go around and get the coalition put together and also to raise the money to pay for it. was that hard to do? james: it is the first time it has ever been done. i tell people it was a textbook example of a way to fight a war. you tell the world what you will do, you get the world with you to do it, you go do exactly what you said and nothing more, nothing less, you bring the troops home, then you get other people to pay for it. that has never been done before. i don't know when it will be done again, but that is the way to fight a war. david: the cold war ends during george bush's presidency. the berlin wall falls down. why did you not recommend george bush go over there to berlin and remind everybody we won the cold war?
james: and dance on the wall. david: that's exactly right. why not? james: this was president bush's decision. and it was it was absolutely the right decision. he got a lot of grief for it. if he had gloated and been triumphant, we would never have been able to conclude what we were able to subsequently conclude. with gorbachev -- the two leaders of the soviet union who, by the way, made the decision not to use force to keep the empire together, and whom history will treat very, very well in my opinion. david: what do you think was the reason you were so successful? was it that you were trained as a lawyer, that you are harder working than everyone else, smarter than everyone else, more clever, surrounded by better people? what was the reason you were so successful? james: lucky. [laughter] david: a little bit more than that probably. james: i had wonderful parents who instilled solid work ethic in me, and by the way, i never
wing it. i have always followed the prior preparation performance. the mantra. i think those things made a difference. but i was brought up to believe that if you start something, you finish it, or you do everything you can to finish it. that sort of thing. but i was there at a wonderful time, a time -- here is what i really think was the best thing for me. i had tremendous associates and assistants. they really performed beautifully. and i was the beneficiary of a lot of that. david: now, relations with europe seem to be under duress. james: america's strength is founded in large part on its alliances. i mean, we have alliances around the world that permit us to leverage our strength. they take care in feeding. and we need to do a better job of caring for them and feeding
about those for a few moments. james: yeah,sure. david: an issue you were deeply involved with, the middle east peace. what do you think is likely to happen? james: i am very pessimistic. i mean, i think the stars are misaligned badly. i don't see any chance of anything in the near term, frankly. and it is very sad. it is sad for the people in the region. it is sad for the palestinians. it is sad for israel. because she should not have to be a nation perpetually at war. there needs to be peace. i used to think it would happen in my lifetime. i'm not so sue now. david: what about korea? james: i don't know. we have done this, starting in 1994 in the clinton administration, where we changed the policy of resolve and determination to one of conciliation and tried to buy north korea off with aid and assistance. we were never able to get them to give up their nuclear
program. i don't see them giving it up. i really don't. i hope we don't go over there and take their promise that they will give it up. david: what about china? james: that is the biggest geopolitical, in my view, challenge facing american policymakers today. how we react to the emergence of china as the new global superpower. she is already an economic superpower. but i mean as political insecurity. david: our relations with europe seem to be under duress. james: i think it is important for us to understand and recognize that america's strength is founded in large part on its alliances. we have alliances around the world that permit us to leverage our strength, our economic strength, military strength, diplomatic strength. those alliances are extremely important. they take care in feeding.
and we need to do a better job of caring for them and feeding. david: on the iranian agreement, would you have done the deal that was done under president obama? or would you have pulled out as president trump? james: i don't think we should have gotten into that negoon to begin with. i think it was a mistake. because we were -- if sanctions were beginning to bite iran, and i think if we were going to get into a negotiation with iran, we should not have done it just on nuclear. we should have done it on nuclear and their support of terror in the region and gotten some promise on that. david: in your time as secretary of state, who was the one or two most impressive people you met outside of the united states as foreign leaders. james: i dealt with outstanding leaders. i think of gorbachev, thatcher, i think of a wonderful former soviet who changed entirely. david: you met gorbachev many times.
james: many times. david: you were impressed with his intellect and abilities. james: yes. david: he seems to have done an incredible job of changing the se of the world. maybe unintentionally, to some extent. james: much of it was unintentional. david: does president trump call you for your advice? james: no. david: so for people who are watching who would say, what are the words of advice for the congress or the administration from the him great former -- from the great former secretary of state, jim baker? james: i think we absolutely have to understand that one of the biggest threats facing our country and facing our democracy is the political dysfunction we have today. we don't -- you know, when i was there 25 years ago with reagan and with bush and ford, we reached across the aisle. we got things done. it happened with carter. it happened with clinton. that doesn't happen anymore.
and that is truly tragic. david: your pleasures are still hunting and fishing? james: yeah, and i like playing golf. i still go to the office. i'm still a senior partner. we have a mandatory retirement policy at age 65. but there is an exemption if you have bchief of staff at te white house, secretary of state. [laughter] [applause] jonathan: well, the -- david: well, they should have that exception. so let me just say, after you left your term in government, i had the privilege of working with you for 15 years in the business and other things. and it was one of the great pleasures of my life getting to see you up close. somebody i had read about. and thank you for your friendship and your great leadership of our country. james: thank you for yours, david. [applause] ♪
scarlet: coming up on "bloomberg best," the stories that shaped the week in business around the world. upheaval in italy. a political stalemate sends shockwaves through the global market. >> italy is basically a country that is raking down. >> we are in a situation today where the fundamentals of italy are very good. >> what we are seeing basically across the board is reduction of risk. scarlet: another week of actions and reactions on global trade. >> it no longer appears to be