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. davit was the reason you were so successful? james: lucky. woman: would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. i'll just leave itway. all right. david: i don't consider myself a journalist, and nobody else would consider myself a journalist. i began to tak the life of being an interviewer even though i have a day job of 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 or are you quite happy with what you're doi now? james: i only miss not having been re-elected in '92 because i think we were getting a lot of things done, and i think we coue continued doing some things. but i have to tell you, life after politics is pretty damn good. [laughter] you're your own boss, you set your own schedule, you do what you wado, and there's a lot to be said for that. let's talk about your career and how you ca to be in the positions that you held. so, you are a native of houston. is that correct? james: right. david: your family had been here for quite some time. . - to be precise. that's quite some time. an when you were growing updid youo be secretary of state, secretary of treasury, chief of staff? no, no. i was raised by a family that didn't really participate inics. politics was sort of a dirty business. and really good lawyers didn't involve themselves in politics. i had a grandfather whosers mantra for the young lawyerss coming to work for baker botts, the family law firm, was "work hard, study, and stay out of politics." and that's the reason i use that title for my most was "work hard, study, and staycent book.litics." so i was pretty much apolitical. were you a star athlete? were you a student leader? what was your great st? james: i was a reasonably decent athlete. uld not say i was a student leader. as a matter of fact, i almost flunked out of inceton university my freshman year because i'd gone to a prep school in pennsylvania, the hill school, which was very strict. we couldn't have dates, couldn't have girls there, and so forth. and 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. david: after you graduated from princeton, you went to the marines, though, before you went to law school. james: marine corps before that, yeah, an ethat was a very maturierience for me, rp james: marine corps and i love the marine and i love it to this day. as you know, there's no such thing as a former marine. david: no. james: when you're a marine, you're a marine. david: my father was in the marines. i understand. i know that. david: after you finished e marines, you came to university of texas law school. you thought about going to law school in the east. why did you come to the university of texas law school? my dad--well, i did that for my dad,oo, or on his advice. he said, "you know--"i think i could have gotten in to harvard law school, and i thought about applying. dad said, "no, you really ought to go to a texas law school because you're gonna be practicing with people from texas." and i think he was probably right. david: all right, so you graduxaed from university of - and texas had a very good law school, too. well, you went in the law review there. you did quite well. so you're ready to join baker and botts. james: ha! they had a nepotism rule, but i was hopeful. one day, my dad came home from work, and he said, "son, tomorrow the firm's gonna give some consideration "to waiving the nepotism rule for you because you've got the grades, "you're on the law review, so forth and so on, "and you're the 4th james a. baker in a row that would practice there." and he came home the next night and he said, "well, the firm decided not to waive the nepotism rule." - [laughter] and i was very down about that. but as i've said to people in retrospect, "it was the best "thing that could ever have happened to me because if i "had senceeded, it would have ecause my dad was there. "and if i sad failed, people woul 'what do you expect? he's only here because his dad is here.'" so it was a good thing for me that they didn't want me to come there. growing up, your father was a tough taskmaster. as i rceember, you said he had ain set of principles james: he kept telling me, "son, a prior preparation prevents poor performance." he called it "the 5 ps," and it was-- again, it was a mantra that sort of guided my life. i can probably say, since we're here at the baker institute, that i thought it mighght - "prior preparation prevents piss-poor performance," ght. [laughter] david: ok, wsal, your father didn'that, but this is your addition to the family mantra. right? - [laughter] - that's right. james: it's an amendment! all right, so u're practicing law, you're minding your own business, you're playing tennis with someone named george herbe 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. - right. - and that is after your wife dies of breast cancer. yeah, 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 fore she died. we were close, even then. and geame to me,e said, "bak," he said, "you know, you need to take your mind off your grief and help me run for the senate." i lot him. i said, "well, george, that's a great idea off your grief and help"except for two things." "number 1--i don't know anything about politics. and number 2--i'm a democrat." and he said,, we can fix that latter problem." [laughter] and we did. and when i'm talking to a room full of republicans, i say, "i got religion," and when i'm talking to a mixed crowd, i say, "i switched partie" so... [laughter] david: right. so, you swched parties. you helped him in the 1970 election for the senate. i've been a little bit bitten by the political bug, not totally or completely. but they asked me to be state nance 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: for jerry ford. that's right. david:ou were offered the position of being deputy secretary of commerce. w did you quickly become somebody who is in charge of finding delegates for prident ford in his race in 1976 against ronaldeagan-- james: well, first of all, the job of deputy secretary commerce, they usually try and find a business lawyer type, and thhat 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 about 6 months, the second tragedy that changed my life. in his campan for the nomination against ronald reag was killed in an automobile accident, and they needed a new delegate hunter. i didn't know anything out delegate hunting, but i found out about it. david: so, to remind people, in 1976, gald ford was president, but he'd never been elected. he was gonna run for -elect-- - run for election. - run for election. and his main opponent was ronald reagan. james: right. and it came down to a very, very tight convention. and your job was to get the delegates for president ford. g- yes. - and how did well, that was the last truly contested national convention of either major political party in this country, and it went down, went right down to the last ballot. it was very tight. we were chasing a very small pool of uncommitted delegates. reaganery strong. he almost knocked off an incumbent president, but we were able to prevail. we used, i willthe full resources of the white house to get there. i used to tell people, "i've been to more sta dinners than anybody in the world,nt because as a delegate 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... - [lauter] the election is-- carter's way ahead. arand then he catches up t the end, ford comes back. they have debates. but ultimate, ford loses narrowly to carter. 's 'cause you were in the white house advising. - well, uh... - [laughter] no, that was later when he lost, but, uh... [laughter] you have now managed a campaign that lt for president. what did you decide to do? you havu decide toed a campaign that ltgo back to texas? - yes. - and... i tell people every timewe , i come back here. a lot of people stay up there. i don't do at. david: so you decide to run for attorney general. james: well, i'd been bitten by the political bug because that cion was really close, it was very exciting. 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 inowa and hawaii, ford would have been president. carter would never have been president. i was bitten by the bug. and ... but i'd prac iced law for 18 years, aas coming back here and i said to myself, "well, maybe you oug to try your hand at this political game." hdavid: and while you were campaigning, you point outy that somebody came up to you and said, "you look like jim baker." well, i'd a gotten a lot of press time as ford's and people used to recognize me. they couldn't really come up with a name. this guy one time did that. said, "anybody ever tell you you look like jim baker?" and i said, "yes, often." and i thought, "boy, th is a big deal." and the guy said, "doesn't it piss you off?" [laughter] that's when i realized, vid, i wasn't gonna win that race. david: all right. all right. you didn't win tha. - that was in 1978. - yeah. and then you get a call not too long after from your friend george bushand. i'm gonna run for president. i want you to help manage my campaign." - so what did you say? - that's correct. james: i helped george bush because he was my close friend. david: ultimately, he did not get the nomination. james: no, reagan got it. i don't think you thought that george bash was gonna be picked ice-president. we didn't. i was in the suite with barbara and george and a few of our campaigstaff. we thought it was all over. when walter cronkite comes out, and he says, "ford is seriously considering joining the ticket eagan"-- well, turns out that when walter cronkite used the phrase uld be like a co-presidency if ford was gonna be the vice-president for reagan," reagan got upset with that. he said, "this isn't gonna work." and he then ultimately called george bush. i took the call. it was drew lewis who was working foreagan. said, "governor reagan would like to speak to ambassador bush," and i handed him the phone. and he said, "yes, sir. yes. how are you? yes, sir. and he said, "yes." and the only question i think reagan asked him was "will you support my position on abortion?" and pres--ambassador bush said, "yes, sir, i will." david: now, you were given a task by ronald reagan to help on the debates? james: to help with the debates, help negotiateebates and help prepare for the debates. david: was it difficult to prepare rean for the debates? people were not confident that he was a good debater. james: a lot of his close-end people didn't want him to debate. i wanted him to. i believe nancy wanted him to. i always thought he was terrific in front ocamera. the red light goes on, he's perfect. reagan wins the election. james: i don't think. i don't know. i'd hear 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's running two campaigns against you and make him your white house chief of staff." and guess what. i don't think it'll ever happen again in american politics, not the way we're going today anyway. david: but ronald reagan did offer u the job. james: he did. david: and you became chief of staff of the white house. mes: r wht. davi it as much fun doing that job as it later is talking about it? b,james: it's the worst worst j, and i tell everybo that. and i tell the peoore who've been nominatedhat job or appointed to that job, "you've got the worst jo "in government "because you're right at the intersection of politics and policy." and for me, it was even woe because i was an interloper. i wasn't a californian. they didn'g give me credit for beconservative. and there were a lot of people that tried to take me out. ys theybut the gipper wasedit foralhere for me,e. d so was his wife. and so it was mike deaver and stu spencer and a whole host of other people. so, reagan was an amiable person. you found him to be quite easy to work for. and it was said that you had to give him a joke every day. he liked to hear a joke every day. anould give you one every day. james: he was the best joke teller you ever heard. - i can't repeat 'em. - [laughter] david: youu'e chief of staff, and doing a good job that everybody thinksis ter. reagan is re-elected. and then you decide to do a swit, which is you become the secretary of treasury. the secretary of treasurcom. whose idea was that, and was it hard to convince reagan of that? at was don regan's idea, and here's what happened.urcom. there had beeak that really antagonized don regan, who was secretary of the treasury. and bydahe way, don regan was good secretary of the treasury. and he was--i think he was probably ronald reagan's favorite cabinet officer. enand they were both irisnd they really related to each other. but d been a leak, and regan got really upset. enand they were both irisand he called me, relachief of staff,er. and he said, "i'm gonna resign. tell the president." i said, "oh, come on, dou're no" i said, "i'm coming over." so i went over to treasury right across the street, and said, "you can't do this." and we chatted for a while. he said, "you're tired, aren't you?" and i said, "are you kidding?" i said, "i've had this job longer than anybodin history that didn't he said, "we ought to switch jobs." i said, "you gotta be kidding." he said, "no, we ought to switch jobs." if the president approves it." and anyway, it went from there. i end been there when presreagan first asked me to take the job. i said, "mr. president, this job's best done in 2-year increments." he said, "fine. we'll do it in 2-year increments." he told susan, "your man's y nna be home at 5:00 evternoon." well, i was neve home at 5:00. and after 4 years and 2 weeks and 3 days, i was still in the job. and regan made that suggestion, so we took it to the president. first, we took it to nancy and to mike deaver, and they both thought it was a good idea. spencer did, too. then we took it to mrs. reagan. she thought it was a good idea. then we took it to the president. so that's how it happened. day d: so you became secret the treasury, and during that time, among other things, became the most signt rewriting of the tax code we'd had for 50 years or so, the tax-- - in a revenue neutral way. - ok. we didn't grow the deficit to do it. - 1986 tax act. - '86, yeah. david: so how did youthat t? deficit to do it. because congress was controlled by the democrats in those days. james: yeah, welworked-- president reagan was very good about reaching across the aisle. and we worked with the democratic leadership in the house t make that happen-- it wasn't easy. it wbu a very close-run thing,w. you go done. and then your friend george herbert walker bush says he wants to run for president. reagan's two terms are gonna be up. george bush is vice-president, and he asks you to help run his campai. james: yeah. david: so were you reluctant to leave as secretary of treasury to do that? well, i was go it. i was gonna do it, if he asked me to. i didn t like the idea of haviget back into the grubby, nitty-gritty of politics, leave the treasury's-- actually, bush is behind for quite a bit of the campaign, catches up, wins. and then do you bay, "ok, i'm ready to g to houston?" no, he knew i wanted to be secretary of state. david:e offered you that right away. james: yeah, yeah, the next day. davite so, as secretary of syou had to deal with a number of problems. one of them was the invasion of kuwt by saddam hussein. your job was to go around and get the coalition put tother and also to raise the money to pay for it. and was that hard to do? james: well, it's the first and only time it's ever been done. so i tell people it was a textbook example of a way to fight a war. you tell the world what you're gonna do, yoget the world together with you to do it, you go do exactly what you said and nothing more, nothing less, you bring the troops home, and then you get other people to pay for it. that's neverbeen donbef. i don't know when it's gonna be done again, but that's the way to fight a war. tu david: the cold war ly ends duringhen it's george bush's presidency. the berlin wall falls down. d david: the cold war why did you not recommat's george bush go over there to. berlin and kind of remind ever - and dance on the wall. - that's exactly right. why not? this was president bush's decision, and it was absolutely the right decision. he got a lot of grief for it. if he had gloated and been triumphal, we would never have been able to conclu what we were able to subsequently conclude with gorbachev and schevardnadze-- the two leaders of the soviet union who, by the way, made the decision not to use force to keep the empire toge ter, and whom history wiat very, very well 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 everybody else, smarter than everybody else, more clever, better surrounded by better people? what was the reason you were so successful? - lucky. - [laughter] david: well, a littlbit more than that, probably. well, i had wol parents who instilled a solid work ethic in me. i think--and by the way, i never wing it. i've always follow "prior preparation prevents poor performance" mantra. i think things made a difference. but i was brought up to believe that if you start something, yer finish it, or you do hing you can to finish it, that sort of thing. but i was there at a wonderful time, a time-- and now here's what i really think was the best thing for me. i had tremendous associates and assistants. they really peormed beautifully, and i was the beneficiary of a lot of it. so, today, as we look at some of the oblems t current president has to deal with, let's just talk about those for a few moments. - yeah, sure. david: an issue that you were deeply involved wit the middle east peace... what do you think is likely to happen? ja'm 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's very sad. it's sad for the people in the region. it's sad for the palestinians. it's sad for israel. because she should not have to be a nation perpetually at war. there needs to be peace. i'm not so sure now. david: what about korea? my sense is that i've seen this movie before, because we've 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 and were never able to get them to give up their nuclear program. i don't see them giving it up. i really don't. and i hope we don't go over there and just take their promise david: what about china? that is the biggest geopolitical, in my view, challenge facing american policymakers today is how we react, how we to the emergence of china as the new global swer. she's already an economic superpower, but i mean as political and security superpower. now our relations with europe seem to be undesome duress. well, i think it is very important for us to understand anstrecognize that america'sngte undesome duress. part on its alliance i mean, we have alliances around the world that permit us to leverage our sh-- our economic strength, our military strength, our diplomatic strength. those als are extremely important. they take care and feeding, and we need to do a better job of caring for them and feeding 'em. david: on the iranian agreement, would you have done the deal that ams done under president or would you have pulled out as president trump? negotiation to begin with. i think it was a mistake. because if sanctions were beginning to bite an, and i think if we were gonna get into negotiations with iran, we should have not done it just on nuclear. we should have done it on nuclear and eir support of terror in the rand gotten some promise on that. david: in your time as cretary of state, you met a lot of prominent prime ministers, presidents, kings, queens. who was the one or two most impressive people you met outside the united states? i g alt with some outstandaders. i think of gorbachev, i think of thatcher, i think of mitterrand, schevardnadze, a wonderful, wonderful soviet-- former soviet apparatchik who changed entirely. - you met gorbachev many times. - many times, yeah. yes, yes. david: he seemed to have done an incredible job of actualhanging the course of the world, maybe untentionally, to some extent. it wasinninten--much of it was ntional. david: so for people who are watching who would say, "wcet are the words of ador the congress or the administration davi"from the great former are secretary of state,say, secretary of treasury, chief of staff jim baker?" of the biggest threats facing our country and facing our democracy is the political dysfunction we have today in this country. we don't--you know, when i was there 25 years ago with reagan and with bush and with ford, we reached across the aisle and we got things done. it happened with carter. it happened with clinton. that doesn't happen anymore. and that's truly tragic. david: so, your pleasures are still hunting and fishing and-- james: yeah, and i like playing golf. i still go to the office. i'm still bsenior partner at bakts. we have a maatatory retirement policge 65, but there's an exemption if you have been chief of staff at the white house... - [laughter] y, secretary of the treasand secre/ you have been chief of staff - well, um... - [applause] y, secrdavid: well, they shouve th. you have been chief of staff so let me just say, after you left as your term in government, i had thilege of working with you for about 15 years in business and other things. d it was one of the great pleasures of my life getting to see you up close, somebody i'd read about. thank you for your friendship and your great leadership for our country. thank you for yours, david. 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