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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."