The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this holiday Monday there were ceremonies in Washington, Atlanta, and elsewhere marking the birthday of Martin Luther King. Secretary of State Shultz in Vienna praised fresh human rights progress by the Soviets and Eastern Europe, and the leaders of North and South Korea agreed to talks to ease tensions. We'll have the details in our News Summary in a moment. Robin.

MR. MacNeil: After the News Summary we begin a week long series evaluating Ronald Reagan's Presidential legacy. Tonight we look at domestic policy -- did he get government off people's backs - - with two former Governors, Richard Lamm of Colorado and Lamar Alexander of Tennessee. Then Judy Woodruff has a career profile of James Baker, the man George Bush has chosen for Secretary of State. Finally, Charlayne Hunter-Gault talks with tennis pro Arthur Ashe on his history of blacks in sport. NEWS SUMMARY

MR. LEHRER: Americans marked the birthday of Martin Luther King today. The slain civil rights leader would have been 60 years old yesterday. Today was the official national holiday to commemorate that fact. In Washington, President-elect Bush spoke at an early morning memorial service. He said King stopped segregation in this country and said as President, he would continue King's work.

PRESIDENT-ELECT GEORGE BUSH: We resolve today on this holiday and in this inaugural week that our nation, our America, will indeed remember Martin Luther King, Jr., that his fight for equality, justice, freedom and peace will indeed be still pursued in the years to come and forever more, that bigotry and indifference to disadvantage will find no safe home on our shores, in our public life, in our neighborhoods or in our home and that -- [Applause]

PRESIDENT-ELECT GEORGE BUSH: -- and that Rev. King's dreams for his children and for ours will be fulfilled. This must be our mission together. It will, I promise, be my mission as President of the United States.

MR. LEHRER: The civil rights leader was remembered today by a march in San Francisco. Among other celebrations, school and church bells were rung in Detroit and a freedom train was organized in San Jose, California. There was also a special service at the Ebenezer Baptist Church in Atlanta, where King and his father had both preached. Former Presidential Candidate Jesse Jackson spoke of the present day problems.

REV. JESSE JACKSON: 10 million more people have fallen through the safety net, lest we forget the 40 million who are impoverished, 29 million are whites, female and young. 1/3 of all African Americans are in poverty, 1/2 of all the African American children are in poverty, fewer in college and more in jail.

MR. LEHRER: This was the fourth year of the national King holiday. All but six states also observe it as a state holiday. The exceptions are Arizona, Idaho, Montana, New Hampshire, South Dakota, and Wyoming. Robin.

MR. MacNeil: Secretary of State George Shultz flew to Vienna today to sign the human rights accord agreed by 35 nations yesterday. On his last mission as Secretary of State, Shultz paid farewell calls today on Austrian leaders. He also had praise for Soviet and East European efforts to make much more open societies, but in conversation with reporters, he renewed the U.S. demand that the Berlin Wall be torn down. He said the wall was one of the acid tests of Soviet performance. The West German Government has now concluded that a Libyan chemical plant built with help from West German firms can make poison gas. Finance Minister Gerhard Stoltenberg told reporters, "We have to assume that at this factory there is a section that will be able to produce poison gas."

MR. LEHRER: The two Koreas have agreed to talk. The prime ministers of the two political and ideological combatants did so in exchange of letters released today. Yung Juan Mock of communist North Korea accepted a proposal from Kan Jung Hun of South Korea for the conversations. Their vice ministers will meet at the border for preliminary talks on February 8th to set the date and ground work for the higher level meeting. If they come off, they will be the first such meeting since the end of the Korean War 35 years ago.

MR. MacNeil: The Soviet Union announced today that its grain harvest dropped by more 7 percent in 1988, yielding a total of 195 million tons. We have a report from Ian Glover James of Independent Television News.

IAN GLOVER JAMES: Today's figure of 195 million is the worst grain harvest in years. Now Moscow must buy 30 million tons from abroad. Mr. Gorbachev is paying urgent attention to food production. He needs to. Meat is rationed in 1/3 of the Russian federation. Bread and potatoes still make up 46 percent of the Soviet diet. But his attempts to make Soviet farmers grow more with land leasing incentives has failed to show results. It means even modern supermarkets like this offer little choice of food and some major shortages, while the Soviet Union has halved its foreign trade surplus importing food it should grow itself.

MR. LEHRER: Another Palestinian demonstrator was killed in the Israeli occupied territories today. A 17 year old youth was shot by Israeli troops during a clash on the West Bank. Another Palestinian died from wounds suffered in an earlier incident. Three hundred and fifty-nine Palestinians have now died since the protest began 13 months ago. Fifteen Israelis have also been killed. Israeli army officials warned Palestinian parents today that they must stop their children from throwing rocks at Israeli soldiers or they will have their houses sealed, their shops closed and their property seized.

MR. MacNeil: In Belgium, more than a thousand policemen with helicopters and dogs searched woods near the City of Mans for former Prime Minister Paul Vanden Boeynants, who has been missing since Saturday. Anonymous callers said his body was in the woods but nothing was found. Yesterday phone callers claimed that a group called the Socialist Revolutionary Brigades had kidnapped Boeynants. Government officials said the former prime minister had been worried recently by threats.

MR. LEHRER: The body of a U.S. Air Force pilot killed in Libya was returned to the United States. The remains of Fernando Ribas- Dominicci arrived at Dover Air Force Base in Delaware this afternoon. Ribas-Dominicci died in an air raid on Libya in 1986. The Libyan Government said it was returning the body as a good will gesture.

MR. MacNeil: And that's our News Summary. Now assessing the Reagan Legacy, profiling James Baker's career and a conversation with Arthur Ashe. SERIES - REAGAN LEGACY

MR. MacNeil: Tonight as we head into the final week of the Reagan Presidency, we begin a week long series on the Reagan legacy. Eight years ago, Ronald Reagan was elected to the highest office, promising to get government off the back of its citizens. Last week, in his farewell address, he took credit for having done so. With us tonight to debate that question are two former Governors and a Republican and a Democrat who served during the Reagan years. Republican Gov. Lamar Alexander of Tennessee, now the President of the University of Tennessee is in Nashville today. And in our Denver, studios Gov. Richard Lamm, a Colorado Democrat and the director of the Center For Public Policy and contemporary issues at the University of Denver. Gov. Alexander, from your view, did Reagan get the government off the people's backs?

FORMER GOV. LAMAR ALEXANDER, [R] Tennessee: Well, that's a little more than he promised. He said the other night that was a citizen politician who came to Washington to put up his hand and say stop. And I think he did that. The tax rates are lower. The regulations that are put out every year by the federal government are less. Power has been pushed back to cities and counties. At the very least he's slowed down the burden on the backs of people. The debt's up but overall he made remarkable progress. He did what he set out to do.

MR. MacNeil: In slowing down the growth and size of the federal government, the growth in size of the federal government, is that what you --

GOV. ALEXANDER: Well, yes, tax rates are down, regulations, new regulations are down. There's less federal spending. Gov. Lamm and I have both served at a time when the job of Governor became different from being just a third Senator to being the best job in the country because so much of the power was pushed back to states and communities. That's a remarkable change.

MR. MacNeil: Do you agree with that, Gov. Lamm? Is government now off the backs of the people as a result of the Reagan Presidency?

FORMER GOV. RICHARD LAMM, [R] Colorado: Well Lamar didn't say that in all fairness and I think that in my opinion the federal government has continued its intrusions but less than any President since Dwight Eisenhower and I think that President Reagan truly did attempt to get government off of the backs of the people. I think by a couple of Supreme Court decisions, I think by some other things that the President has done. I think that every President of the United States federalizes his values, in other words, he reaches up for pre-emption on those things that he thinks are important. It turns out that President Reagan I think in all fairness did less of this than any recent President but federal power is still growing.

MR. MacNeil: Federal power, well, do you disagree there with Gov. Alexander on that? You don't think that the growth of federal power has been slowed down?

GOV. LAMM: I don't even think the growth of federal spending has been. The taxes, he's right on taxes, but federal spending is about at the same where it was when President Reagan took over and I think when you look at the various programs the President has signed and/or pushed, for instance, seatbelt laws all mandating that all states have to have seatbelt laws, or drinking age or speed limits. In other words, I think that this President like every President has looked at certain programs and simply reached out and put more burden on states and pre-empted state and local government, but I think credit, giving credit where credit is due, he's done less of that, and I think that he should get credit for the lesser amount.

MR. MacNeil: Let's talk about deregulation for a moment. Gov. Alexander, where have you felt federal deregulation, where have you at the state level felt it?

GOV. ALEXANDER: Well, Chatanooga has felt it, Knoxville has felt it because air service is worse for an example. That started before President Reagan came in and continued. Trucking is where we've felt it. As far as state government goes, in '79 and '80, we used to go to Washington and ask for this money or permission to do that. By the time we were in the late '80s as Governor all the Governors would get together and they would talk about how to fix their own schools. In our state, for example, we're building a hundred miles of interstate highways 100 percent with state money, not any federal money so --

MR. MacNeil: Why are you doing that?

GOV. ALEXANDER: Well, because we need it. It's an investment to create new jobs. We're connecting highways already built and automobile plants and their suppliers are finding more places to locate. That's helped our state make a lot of progress in terms of the money that goes in our pocket. So I think the President succeeded to a large degree in creating a freer economy in which we could do what we were smart enough to do.

MR. MacNeil: But why is Ronald Reagan responsible for your building, as the state, building more roads?

GOV. ALEXANDER: Because 10 years ago all most local and state officials would do is get on the airplane and go to Washington if they wanted something done. What I did was stay home. What most other Governors did was stay home and say if we want new roads, let's build them. We need a new library, let's build it ourselves. Put the spotlight out of Washington and push power back our way. For example, take the education department. Instead of Washington talking about setting school codes, school dress codes for the communities, you have parents talking about choice of public schools for their children. That's a big change, both parties.

MR. MacNeil: Gov. Lamm, do you want to comment on that?

GOV. LAMM: I would suggest that Lamar is confusing cause and effect. I think that it is true that there is certainly less of these intrusions on the federal government but that's because the President has cut back most state and federal governments. I think what he is observing is the fact, is a gigantic withdrawal of federal funding from a number of these programs. Luckily, the states and local governments have moved in. But I think -- unlike President Carter who really looked at new federalism as a way of saying how do we sort out the functions of government, how does the federal government take this, state government take that, local government take a third thing that what President Reagan has done, his has been a budget cutting exercise. He has tried to balance the budget on the backs of local and state governments.

MR. MacNeil: Would you agree with Gov. Alexander that this has made Governors more important, more powerful?

GOV. LAMM: There's no question about it. I think that that's really a very important point. Into that vacuum moved aggressive Governors like Lamar Alexander and I think that it is a vacuum, however. It wasn't a political science exercise of how do we allocate power in a federal system. What it was was an abdication of power of a funding on the part of the federal government.

MR. MacNeil: Gov. Alexander, is it good -- taking the people of Tennessee who are citizens of Tennessee, but citizens of the United States, is it better for them that the Governor of Tennessee is now more powerful?

GOV. ALEXANDER: I think it's a lot better but I'm a little biased. When it comes to helping schools be better, protecting the outdoors around communities, deciding how to create environments in which new jobs can go, we can do it more our way and we can do it more effectively. Tennessee has prospered more for whatever reason in the last seven or eight years than it has more at any seven or eight year time in its history and I think the reason is because we've had a chance to do more things for ourself and we're smart enough to do them but we didn't create the jobs. The President helped us have a freer economy so that we could create our own garden for new jobs, so to speak.

MR. MacNeil: Well, that wouldn't be true of Colorado, Gov. Lamm, would it? It hasn't prospered more in the last seven or eight years than before.

GOV. LAMM: No, but I've got to say we've had an oil crisis out here, we've had a number of other problems, but let me make again this point. Lamar is absolutely right. I can't tell you, both Democrat and Republican Governors got so tired of playing Mother May I with some GS-16 at a federal level that controls so many rules and regulations, each with its own regulation book, but I do believe that what President Reagan did was instead of simply saying sorting out, I know in the schools that Lamar mentioned, school, federal funding is 6 percent of Colorado's school budget on an average, but it's 39 percent of our paper work. He's right. There was a lot of federal intrusion that we're glad to be rid of, but I don't think this was purposefully done by the Reagan administration. It is a net result of really withdrawing wholesale in the area of state and local grants.

MR. MacNeil: Well, Gov. Lamm, how would you evaluate the services that the citizens of Colorado get in which the federal government has some say or funding share eight years, after eight years of Reagan's new federalism?

GOV. LAMM: I would evaluate the fact that the current administration has attempted on the margin to reduce rules and regulations that come with a lot of these federal grants. They've eliminated a lot of the federal grants. There are simply fewer than there were before. And I think that there are some new ones. There are things like the new Medicaid. The federal government has gone through and mandated states to have certain things under Medicaid now that they never did before. And that's 40 or 41 cents state dollars, but I do think that the amount of federal intrusion has diminished, but I think it was an indirect benefit rather than a positive result that was sought after.

MR. MacNeil: Well, Gov. Alexander, have you at the state level been forced to increase the amount of your intrusion? For example, take advertising. As a result, some critics or observers of the advertising industry, as a result of a rather passive FTC, Federal Trade Commission, in imposing restrictions or regulations on advertising at the federal level, the states have had to a lot more aggressive job in regulating advertising at that level. Has it made state government more intrusive?

GOV. ALEXANDER: We didn't regulate advertising. I don't really think so. I think what states do is make investments in roads and in jobs and in schools. And that's what we did. In response to the question you asked Dick Lamm a minute ago, our people are on the margin better off because they have more money in their pockets to spend. Instead of being forty-seventh in average family incomes in America, we're thirty-sixth. Somewhere during that time we got more money in our pockets, so we can spend that on our own services. There may not be more government services but we'd have more money to buy what we need to buy.

MR. MacNeil: Gov. Lamm, has it made your state government or the government of your successor in Colorado more intrusive to compensate for a certain passivity in the federal government?

GOV. LAMM: No, but it should have. What it's done in our state is that it has given the state legislators an excuse to further cut the budget. In other words, the whole tone that President Reagan set early on about budget cuts or about tax cuts has been too tempting for California legislators to resist. So what they did is that they ended up not picking up into this vacuum in many instances and the poor local governments which are the ones, after all, there's nobody else you can pass it onto, have often been caught picking up the gap. So Colorado was one of the lowest states in per capita state taxes, but local property taxes are astronomically high. So our state legislature did not pick that vacuum. It simply devolved the problem on down to local governments.

MR. MacNeil: Is that the same in Tennessee?

GOV. ALEXANDER: Well, that is, that's about the situation here too. No, it's a little bit different actually. I'm one of those Republicans who believes in being activists, one of those who thinks after you vote no in Washington, which I would have done, then somebody's got to do it. I mean, if the schools aren't very good, if people aren't learning in the third grade, if the road's got a whole in 'em, somebody's got to fix that. So our state government has been pretty active and including raising taxes to pay the bill. Our overall tax rate is still one of the lowest in the country but we've had a big better schools program, new road programs, new prenatal health care programs. We've paid the bill for that, so I guess having said that would disagree. In our state we've been more active, not less.

MR. MacNeil: Would you -- we have just a second or so left -- would you say in a word there has been a Reagan revolution in terms of federalism?

GOV. ALEXANDER: I would. President Reagan told us what he wanted to do before he came in and he did it. And since we don't have a Parliamentary system or a king where people can just do things automatically, I think he has changed the agenda, turned things around, put a harness on the Washington government and handed the ball to us.

MR. MacNeil: Gov. Lamm, a Reagan revolution?

GOV. LAMM: I don't think we can really tell. History writes evaluations, not us in the current. I think time evaluates and I think when you really get the result of these deficits, this riverboat gamble that we took some eight years ago, I think we have to wait to see what is the long-term effect, but I do think that, in fact, President Reagan did come in thinking that there should be less federal government and more emphasis on state and local government. I think that he has at least been consistent with his ideals.

MR. MacNeil: Okay. Well, Gov. Lamm, Gov. Alexander, thank you both for joining us.

MR. LEHRER: We will continue our series on the Reagan legacy tomorrow night when former Vice President Walter Mondale and former Secretary of State Alexander Haig look at the foreign policy record. Still to come tonight on the Newshour, a profile of the next Secretary of State and a conversation with Arthur Ashe. PROFILE - THE PROFESSIONAL

MR. LEHRER: Next, James A. Baker, the man who will be the next Secretary of State, the man with the best press clippings of just about anybody who has served in Washington lately. Judy Woodruff in a major report tells the story of his remarkable Washington power.

PRESIDENT-ELECT BUSH: It is my intention to name James A. Baker III --

JUDY WOODRUFF: The polls had barely closed and George Bush's victory was only hours old when he called a news conference and named his first cabinet appointee, James A. Baker the third to become Secretary of State. It was the earliest cabinet appointment made by a President-elect in modern history and the pay off to a longtime special friend.

GEORGE BUSH: [August 5, 1988] Starting in Texas a long time ago, Jim and I have shared a lot together, a lot of family things, a lot of politics.

MS. WOODRUFF: Just three months earlier, a beleaguered George Bush had gratefully announced that Baker was giving up his post as Secretary of the Treasury to take over the then slumping Bush campaign. At the time, it was almost as if Baker were a knight on a white horse come to save his old friend from defeat.

JAMES BAKER: I am a realist about the difficulty of the task that faces us.

MS. WOODRUFF: Coincidentally the week that Baker took over was also the week Bush surged ahead in thepolls, the start of what would be a steady march to victory in November. Baker is given much of the credit for that even by the man who had been running the campaign before Baker took over.

LEE ATWATER, RNC Chairman Designate: He is the best and in the 15 to 20 years I've had a chance to work with virtually everybody in the political business and he's the best.

MS. WOODRUFF: Lee Atwater ran the Bush campaign for three years but stepped down to become No. 2 when Baker came aboard. Recently named by Bush as Chair of the Republican Party, Atwater reflects the almost worshipful comments many who know Baker make about him publicly.

LEE ATWATER: People are delighted to sit down at the table and deal with Jim Baker; it's an honor. Every morning you know I felt like I want to pinch myself every morning that I came into this campaign and was the No. 2 guy to Jim Baker.

MS. WOODRUFF: Even Democrats like former party chairman Bob Strauss are open in their praise of Baker.

BOB STRAUSS, Former DNC Chairman: Jim is very good, Jim is very bright. He is a quick study. He likes politics. He understands issues. He's one of -- he has an instinctive feel.

MS. WOODRUFF: Baker's rise in Washington had its roots in his friendship with George Bush dating back to the 1960s in Houston. Baker was the son and grandson of prominent lawyers. He had gone to Princeton before practicing law himself. It was Bush who first got him involved in politics. Hoping to take Baker's mind off the death of his first wife, Bush asked Baker to work in his 1970 Senate race. Bush lost, but five years later, he helped arrange for Baker to win an appointment in Washington as Undersecretary of Commerce in the Ford administration. The next year, President Ford was in a fight with Ronald Reagan to win his party's nomination. Baker was asked to run the critical Ford delegate operation. He did such a good job the Ford people put him in charge of the fall campaign. Congressman Dick Cheney was then Ford's chief of staff.

REP. DICK CHENEY, [R] Wyoming: It was a successful venture in the sense that we went from a deficit of 33 points in July to coming within an eyelash of winning. We closed a gap of over 30 points.

MS. WOODRUFF: After Ford lost to Jimmy Carter, Baker went home to make his one and only run for elected office in the 1978 Texas Attorney General's race.

JIM BAKER: [1978 Baker Political Commercial] Listen to this. A man sentenced to 99 years on a narcotics charge is released on $20,000 bond. Result: a police officer killed, a family destroyed. With easy paroles and sentences that are not enforced, we ask for trouble and we get it. The next Attorney General should be the toughest man in Texas. He has to be. I intend to be.

MS. WOODRUFF: Baker was beaten, but he was soon running someone else's campaign, his friend George Bush's 1980 try for President. This one too would go down to defeat. Journalist Fred Barnes says at least partly because of a miscalculation made by Baker.

FRED BARNES, The New Republic: Jim Baker thought that John Connolly was going to be the chief opponent of Bush for the nomination and Ronald Reagan, this beloved figure. If you know anything about conservatives in the party, you knew that Ronald Reagan was a beloved figure and should be the logical guy to win the Republican nomination.

MS. WOODRUFF: Barnes and others say Baker and Bush under estimated Reagan and failed to gear their campaign against him. Later, however, Baker orchestrated Bush's withdrawal from the race before Bush was ready to quit but in time to make Bush acceptable as Reagan's running mate. Ironically, Baker who had not taken Reagan seriously, became an adviser in Reagan's fall campaign and later his White House Chief of Staff.

BOB STRAUSS, Former DNC Chairman: In very short order, he went from being a rather distrusted stranger with some talent to a very trusted member of the inner circle who was then beginning to assist in making campaign decisions. And I think it speaks very well for Ronald Reagan, that he had the, that he trusted a stranger, which they rarely do, and put him in charge of that White House operation.

MS. WOODRUFF: Early in his tenure at the Reagan White House, Baker was one member of a ruling troica that included Ed Meese and Michael Deaver, but Baker's political and organizational skills led eventually to his prevailing as the dominant figure in Reagan's first term.

SEN. ROBERT DOLE, Senate Minority Leader: Well, I think he's been sort of the star when you've look at all the people who have worked with the President and where they've been and how they've gotten along with the President and with the Congress. I think Jim Baker on a scale of one to ten has a ten.

MS. WOODRUFF: Journalist Fred Barnes says it is Baker's talent for deal making that has contributed to his success.

FRED BARNES: Jim Baker likes to deal. He could take Reagan's hard ideological position and go up to Congress with that and work out a deal where Reagan would actually come out pretty well, gave away a lot on the tax cut but generally Jim Baker made good deals. Conservatives attacked him for not sticking with the full blown Reagan proposal but I think Reagan was very happy with what he got.

MS. WOODRUFF: Many Republican conservatives have criticized Baker's emphasis on pragmatism over ideology, but others give him credit for the deftness with which he handled one of the toughest jobs of the Reagan Presidency. Richard Perle was an Asst. Secretary of Defense while Baker was in the White House.

RICHARD PERLE, Former Assistant Secretary of Defense: He's just very good at issues of timing and presentation and approach. If you look at the period when Jim Baker was White House Chief of Staff and the period when he was not, the White House performed more effectively, more efficiently, more cleverly, if you will, when Jim Baker was there. The Regan/Baker switch was in my view the beginning of the second and less glorious phase in the history of the Reagan presidency.

MS. WOODRUFF: Perle's reference is to the job swap between Baker and former Treasury Sec. Donald Regan who became White House Chief of Staff in early 1985 at the same time Baker was named to the Treasury post.

PRESIDENT REAGAN: [January 8, 1985] Upon confirmation as Treasury Secretary, JIm Baker will become chief economic spokesman for my administration.

MS. WOODRUFF: Some criticized Baker for putting his own career first, for walking out on the critical White House post just when Ronald Reagan needed him most. Baker, himself, has said he was exhausted by the chief of staff job and ready to move on. What he moved into was a more visible position where he was more directly accountable for his results. Assessments of his performance are mixed.

KEVIN PHILLIPS, Political Analyst: He was in Treasury during the period of time in which the United States racked up record budget deficits, became the world's leading debtor nation, devalued the currency, and incidentally passed a tax reform which polls show that people didn't like when they took the polls back in April this year, so that's not such a terrific record.

FRED BERGSTEN, Economist: I'd give Jim Baker at least a 7 or 8 on a scale of 10. Interestingly, I'd give him a 9 or better on his international economic activities. I think his domestic efforts on the budget, on tax reform were less successful.

MS. WOODRUFF: International economist Fred Bergsten and Republican political analyst Kevin Phillips both say Baker bears some of the responsibility for the failure of the Reagan administration to cut the budget deficit.

KEVIN PHILLIPS: Well, he took the need to raise revenues somewhat seriously in 1982 and '84 and there were tax increases in those years. Basically, he never put the weight of his perceptions behind anything that was enough pressure to move Ronald Reagan.

MS. WOODRUFF: On the federal tax reform package of 1986 economist Bergsten says while Baker inherited the idea from others, he is one of several people who deserve credit for pushing it through Congress.

FRED BERGSTEN: Making compromises against some of the ideological preferences of the administration in order to get a deal, pragmatism shown through. Getting a result was what dominated the policy decisions and to that I give a lot of credit to Sec. Baker.

MS. WOODRUFF: A different observation is made by Democratic Sen. Bill Bradley who was one of the originators of the tax reform idea. Bradley says while Baker stressed a bipartisan, nonideological approach, it was obvious who Baker was trying to satisfy.

SEN. BILL BRADLEY, [D] New Jersey: I think he also had clearly in mind Republican constituencies that he was going to serve through the tax reform effort. I mean, you know, he wasn't going to do too much that was going to hit business. He's a fierce defender of big oil and the oil business generally and therefore, you know, some of the times, he would be excessively defensive when the issue of oil was raised and I think he was very sensitive as to what his political base was as he was formulating an overall plan as most good politicians are.

MS. WOODRUFF: Bradley credits Baker for having the keen political sense to get involved in tax reform in the first place.

SEN. BRADLEY: I think that he clearly sees from time to tome when an issue if it's taken by the Democrats could create some problems for the Republicans and he is very skillful at trying to pre-empt that. I think that's precisely what happened with tax reform where he moved in to pre-empt an issue which was a good Democratic issue.

MS. WOODRUFF: Bradley also says he thinks Baker's 1985 move to ask all the leading industrial democracies to coordinate their currencies in an effort to drive down the value of the dollar was in response to a Democratic initiative. Whatever the source, many give Baker credit for, in effect, a U-turn in U.S. policy.

FRED BERGSTEN, Economist: The first Reagan administration had simply let market forces drive the dollar sky high because of an ideological aversion to any kind of intervention. Baker convinced the rest of the government that unless they took an active role in bringing the dollar down and starting to reduce the American trade deficit, there'd be an enormous outbreak of trade protection, the Congress would go wild.

MS. WOODRUFF: Baker was praised for improving financial relations among the allies until his attempt in October 1987 to pressure the West Germans to change their monetary policy.

JAMES BAKER: [Oct. 15, 1987] What I really said was that we do not look with a great deal of favor on what's happened over there recently on the monetary front.

SPOKESMAN: Unquestionably I think Sec. Baker was partially responsible for the crash October 19th. When the Secretary of the Treasury, in this case Baker, says we're reducing the value of the dollar, he's telling all those people who put their money in the United States, my policy objective, the policy objective of the United States Government, is to reduce the value of your investment so what happens? They pull their money out. They pull their money out the market crashes.

MS. WOODRUFF: But what may be the worst blot on Baker's record at Treasury is the outcome of his proposal to tackle the third world debt. Veteran diplomat Sol Linowitz.

SOL LIINOWITZ, Diplomat: Well, the Baker plan has not worked. I think he meant well. It was a reasonably well calculated effort to deal with the problem by relying on further financing from the banks so that these people could begin to do the things they have to do inside of their own countries but nobody in Latin America today believes that the Baker plan can work.

MS. WOODRUFF: Most agree Baker's plan did buy time for U.S. banks that had made millions of dollars in unrepaid loans. But on the longer term challenge of getting the economies of the developing countries growing again, economist Fred Bergsten says the Baker plan fell short.

FRED BERGSTEN: Some of the countries like Mexico have made a lot of constructive adjustments but others have not and on that count the plan is far from successful.

MS. WOODRUFF: Harsher words come from Sen. Bradley, the author of an alternative plan for dealing with the debt crisis. He says Baker was wrong to assume as he did that U.S. banks would increase their loans to the debtor nations.

SEN. BILL BRADLEY, [D] New Jersey: It was a non-starter from the beginning. It as in some senses high in PR, low in follow through and it has resulted in virtually no movement whatsoever on the debt issue, and even as I speak today, democracies in Latin America are endangered, and it really never, the reason it didn't get started is that banks, themselves, just wouldn't put any money in and he didn't push them to put money in.

MS. WOODRUFF: How is it then given his fair share of mis-calls that Jim Baker has such a reputation for success?

FRED BARNES, The New Republic: Somehow the press always forgets when Jim Baker makes a mistake and he's treated as a genius, as a guy who has perfect political pitch. Nobody does, not even Jim Baker.

MS. WOODRUFF: Barnes says Baker has gone to great lengths to develop good press relations.

FRED BARNES: When Don Regan took over as White House Chief of Staff in 1985, the Regan people were amazed at how much time from looking at the logs Jim Baker had spent with the press and it was time well spent.

MS. WOODRUFF: Congressional leaders say Baker works just as hard at cultivating the politicians he has to deal with.

SEN. ROBERT DOLE, Senate Minority Leader: I think he does it the old fashioned way. You know, he just works at it. And he'll go off in a corner with one Senator or one member of Congress, maybe a Democrat, maybe a Republican, go off and sit down with Dan Rostenkowski or Tom Foley or Jim Wright or Bob Patrick, whatever it is, he's got the staying power.

REP. DICK CHENEY, [R] Wyoming: He doesn't antagonize or offend even the people he defeats in the course of a struggle. It's a special skill. It's a special skill. I think it's based more on intuition than it is intellectual capacity.

MS. WOODRUFF: Those who know Baker best say underneath his easy going manner is a workaholic, who leaves not even the smallest detail to chance. They also say he's a man who is by nature cautious.

SEN. ROBERT DOLE: Well, one thing he never does, he never oversteps his authority. I mean, he understands he's at the table representing the President, not representing Jim Baker or even Jim Baker's views, and he's going to tell you that right up front and he'll remind you of that every time -- you say what about this - - he said, I'm here representing the President, I'll get back to you.

SPOKESMAN: I have kidded Jim Baker many times about being overly cautious, too cautious. What are you scared of? But it's always in jest. But he is a cautious, very cautious man.

MS. WOODRUFF: Baker's friends also say he has come up with a way to compensate for his lack of background in the complex policies he presides over.

SPOKESMAN: He knew and others knew when he was dealing with very sophisticated European central bankers and the like that he was dealing with people that had far more background and depth than he did. And I think Jim Baker has always been one of those who's had enough sense to know what he doesn't know and to keep himself surrounded by people. He's a very quick study.

MS. WOODRUFF: Strauss says he refers to talents like Richard Darman, who was Baker's deputy at the White House, later No. 2 at the Treasury, and has now been tapped by George Bush to run the Office of Management & Budget. Even Baker admirers, say he will need similar talent around him when he moves to the State Department because of his lack of experience in foreign policy.

SOL LINOWITZ, Diplomat: I think it is a handicap to the extent that if you can come in with the knowledge of what goes on in various parts of the world, have been part of trying to deal with the problems, you hit the ground running. And to that extent there's a lot of learning to do before you are sure-footed.

MS. WOODRUFF: Some predict Baker's lack of experience could force him to become too reliant on advisers.

KEVIN PHILLIPS, Political Analyst: I wouldn't be surprised if the State Department didn't have swallow him. I think from the standpoint of international economics that he's been involved enough in subject matter that he dealt with as Treasury Secretary that he'll deal with again as Secretary of State, but when it comes to geo political strategy and disarmament and diplomacy and the Middle East and so forth, I think there there's a good chance that he'll delegate a fair amount, that the State Department types will sort of swarm in around him and half take him over.

MS. WOODRUFF: That possibility worries conservatives like former Pentagon official Richard Perle, especially now that Baker has chosen a Henry Kissinger protege, Lawrence Eagleburger, to be his deputy.

RICHARD PERLE, Fmr. Asst. Sec. of Defense: The danger is that he will succumb to the institutional outlook of the Dept. of State, that he will become a creature of the professional foreign service which is an institution that above all else emphasizes compromise and accommodation often at the expense of purpose and policy.

MS. WOODRUFF: But observers say that's exactly Baker's specialty, stressing immediate solutions instead of a purpose that may take time to work out.

SEN. BILL BRADLEY, [D] New Jersey: I think that he likes action. I think that he is in some senses very predictable. I think that he is a good lawyer and I think that's basically the way he ran the Treasury Dept. and that's the way I think he'll run the State Department.

MS. WOODRUFF: Sen. Bradley points out problems facing the Secretary of State don't usually lend themselves to quick fix solutions.

SEN. BILL BRADLEY: He'll have to have a much better appreciation of the chess board than as Treasury Secretary in terms of understanding that what happens today isn't necessarily as important as what happens five years from now.

MS. WOODRUFF: Congressman Cheney says unlike Henry Kissinger who was known for his bold geo strategic thinking, Baker can be expected to carry out a strategy laid out by someone else.

REP. CHENEY: I think you're more likely to see out of Jim Baker a serious effort to try to build broad bipartisan consensus on foreign policy, whereas, what Kissinger was good at was specifying what the foreign policy ought to be and thus providing the international rationale for how the U.S. ought to conduct itself in the world. I suppose you might argue that you'd like to be able to meld together a Henry Kissinger and a Jim Baker but you know that's never possible.

MS. WOODRUFF: Fred Barnes adds that Baker's less than perfect record with international issues at Treasury portends challenges ahead at the State Department.

FRED BARNES: It shows that the skills that he has in wooing reporters and Congress are not necessarily going to be translated into foreign leaders swooning over Jim Baker the way everybody in Washington does. It just doesn't work that way. It's a lot tougher playing field. These are tougher people to deal with. CONVERSATION

MR. MacNeil: Finally on this holiday evening a conversation with Tennis champion Arthur Ashe who retired from the game after quadruple bypass surgery but who's remained close to the world of sports as a tennis coach and commentator. Late last year he completed A Hard Road To Glory, a three volume history of blacks sports figures, most of whom had never made it into the history books until now. Recently, Charlayne Hunter-Gault spoke with Ashe about his book and asked him why he undertook the massive six year project.

ARTHUR ASHE: I was just first hit with the sadness that it did not exist when I went to look for it and I just had the audacity, I guess, to think that I could do it, but I wanted to do it the way I wanted to do it in order to answer the questions that I would have asked had I had the chance, and then afterwards, there was another rationale for having done it, and that was that now with a lot of reference books that I saw written by whites written about sports, people, a lot of them were just wrong, incomplete. You've got to go back and reassess a lot of things that were written because they just don't tell the whole truth, one example being the 1920s which everybody described the golden decade of sports, but more appropriately, it should have been called the golden decade of white sports, because in that decade blacks were systematically shut out of a lot of sports which they star in today. That's just an example.

CHARLAYNE HUNTER-GAULT: How hard was it to do that, to get this information?

MR. ASHE: It was very difficult. I relied very heavily on black newspapers. Sometimes their reports were just not right at all but we cross referenced them but still, black newspapers were an enormous source of information. Black colleges were very positive and influential sources of information, in particularly Tuskgege. Tuskgege in 1911 started amassing information about black personnages in general. They were very sad stories, even though some of the black newspaper reports may have embellished some stories a bit, but still the one that for me was most tearful was the case of Reese Goose Tatum, a very famous basketball player with the Harlem Globetrotters that I remember as a kid who was as I've mentioned one of the most adept handlers of a basketball the world has ever seen and his demise brought tears to my eyes. He died poor and lonely and his teammate, Marcus Hanes, another Globetrotter, heard about his death almost by accident and rushed to get to the cemetery before he was buried and then when he wound up at the cemetery, rushing there with his wife, he got there too late and he asked the cemetery workers if there had been a nice service there for Goose Tatum and the cemetery worker says no, they just drove up the hearse to the curb, took out the body, put it in a hole, and drove away. And there had been no service at all at the funeral home as well. And so Marcus Hanes went to the store and he bought a very inexpensive bible for $2.98 and went back to the cemetery and said the Lord's Prayer over his friend's fresh grave and drove away, and that is just no way for somebody as great as Goose Tatum to leave us, but that wasn't too atypical of what had happened.

MS. HUNTER-GAULT: When you look around today do you draw any encouragement from what you see black athletes doing --

MR. ASHE: Yes.

MS. HUNTER-GAULT: -- in terms of the larger society?

MR. ASHE: I do draw lots of encouragement now because more black athletes now are surviving their playing years with their brains, their psyche and their wallets intact and so when I look at someone like Sugar Ray Leonard or Larry Holmes or Michael Jordan or Julius Irving, I see now these are the real role models because when their story is told that they made some money, yes, but they saved it, and they invested it and the black community is benefiting, that's encouraging to me.

MS. HUNTER-GAULT: In the long time that you worked on this, did you encounter any surprises?

MR. ASHE: I met a lot of surprises. I would say the first category of surprise was the number of unbelievably good athletes, superior athletes, that I had never heard of. For instance, the almost complete domination in the last part of the 19th century of blacks in horse racing as jockeys. I mean, I never knew that existed, just didn't know at all. One of the reasons was because in a race it was just very dangerous. If anybody's life was going to be at stake, well, let's have some little black slave's life be at stake so that's the way it developed, and around 1890 a lot of things were starting to happen. Socially and historically reconstruction was well over and in the South blacks were sort of reenslaved through legal means in the South and in many cases in the North through restrictions. And the jockey club was formed, a group of white jockeys got together basically to come up with some minimum standards for all jockeys on all the tracks north and south, and basically one by one as the jockeys who were working came up for their license renewal, the black jockeys were turned down one by one, and the reason was very simple. They were just making too much money. At his heighth, I would say, Isacc Murphy, who was I think probably the greatest black athlete of the last century, he was making $25,000 a year, and he won raves from owners and trainers and fans alike. They all thought and their thoughts were recorded in lots of different books and magazines and newspapers, that he was just the greatest jockey they'd seen in memory. And 1911 was the last year that a black jockey appeared in the Kentucky Derby and we haven't seen any at all since then.

MS. HUNTER-GAULT: Why is it that black athletes predominate in some sports and not in others?

MR. ASHE: There have been all sorts of theories advanced to explain why that is so but all I can think of is that it began with a cultural emphasis rather than some genetic endowment I think we had because certainly there were quite a few white athletes who certainly could do those things but for me one of the most fascinating phenomena which arises out of your question is that today, as we sit here now, 1988, the end of '88, white coaches in junior high and high school and to a limited extent in college and young white athletes have been brain washed in the last 20 years into believing certain positions and certain sports are impossible for them. Young white athletes now are steered into certain positions so they won't have to compete with black athletes who are perceived to be so much superior. I mean, I rhetorically ask the question sometimes how many white sprinters have you seen run the 100 meter dash under 10 seconds? None. How many white wide receivers are there in the NFL? None. What is the percentage of blacks in the NBA? It's approaching 90 percent.

MS. HUNTER-GAULT: You talked about the black athlete as role model. Is it much different than before?

MR. ASHE: The first real role model for black America among black American athletes was Joe Lewis, maybe to a lesser extent Jesse Owens, in the sense that before World War II we were sort of proscribed from -- we meaning black America -- black Americans were proscribed from being No. 1 in anything except entertainment possibly in sports and it evolved to today where you have to pick your role models very carefully because there seems to be, there seems to have been a marked breakdown of traditional black cultural values that are reflected in a lot of the black athletes we have today because just statistically speaking a great percentage of the black athletes today come from the black under class, from inner city areas where traditional black cultural values are not nearly as pronounced as they were when we all had to live in the same community whether we liked it or not.

MS. HUNTER-GAULT: Every day it seems that you open the newspapers and there's another athlete whom we assume as a role model who's hooked on cocaine and steroids. Then are you saying that drugs are going to destroy all of our heroes?

MR. ASHE: I wouldn't say drugs will destroy all of our heroes, but it will certainly rake a big path through the stable of athletes, people who are very public and who have a lot of money to spend on it.

MS. HUNTER-GAULT: So what can be done about that?

MR. ASHE: I think the attempts to deal with it very firmly, especially in the very beginning, is a good idea.

MS. HUNTER-GAULT: What do you mean?

MR. ASHE: For instance if you take the three major team sports, basketball, baseball and football, I think sometimes they're a bit lenient with first time offenders. I think it's going to take more input and effort by the black community itself, first of all because no one else seems to be that interested in doing it. To a lesser extent corporate America because there's a coming labor shortage and they know that if they don't at least provide for a minimum level of education for all of us as we finish high school, then the entire American economy is going to be imperiled.

MS. HUNTER-GAULT: We were talking a few moments ago about the fact that there were areas in which blacks predominated in sports. What about tennis? I mean, your own sport, that's one where there's certainly very few blacks.

MR. ASHE: I get the feeling that the American athletic community still administered by whites predominantly really want to see some sports not taken over by black athletes. I think they're actually afraid that if you let blacks in the door in some sports that in a matter of time they'll just take it over.

MS. HUNTER-GAULT: Would you call that racism?

MR. ASHE: I think yes, it's certainly racism in some instances, in some locales. For instance, I'll give you a very good example. There was a black girl just a year ago in Arkansas who was on a high school team. She was the first black player to make her high school team and traditionally, with no thought about anything else because there were no minorities ever on a high school team, this high school played some of its matches at a country club which was no big deal. And the coach never figured it would be a problem and the black girl showed up to play her match and she could not play at the country club and this was like a year and a half ago, couldn't play. And that's just an example of the problems that are still out there that have never been addressed before because there have never been that many minorities present. Tennis is undergoing a racial cultural transformation and I have warned as have several other people have warned the American tennis authorities that be that look, it was just one thing when there was one or two people in the sport like myself. And I've got a college degree and I'm reasonably familiar with the way you all think, but if you're going to see a coming influx of athletes, minority athletes from the inner city who otherwise wind up in the NBA or major league baseball or the NFL and they happen to be pretty good and they continue to win, well, we're talking about a whole change in the cultural norms of the sport and there's going to be tremendous resistance to that, tremendous resistance to that.

MS. HUNTER-GAULT: What do you mean a change in a cultural norm?

MR. ASHE: Black athletes have changed every single sport that they have decided to get into in a big way, every single sport. In basketball before Bill Russell came about nobody blocked shots. In major league baseball within four or five years of Jackie Robinson coming in the books, the records on stolen bases were completely rewritten. And in football before James Brown you wondered how did anybody do what they did because Jim Brown was so superior. The same thing will happen in tennis.

MS. HUNTER-GAULT: Arthur, you're one of those good positive role models and a nice person. How do you keep your feet on the ground?

MR. ASHE: I think the main factor is that I could not face my father if I didn't. That's what it boils down to. If I didn't do what I was supposed to do, my father would kick my ass, and I had a very strong father figure, partially I think because my mother died when I was very young. I was six years old. She was only 27. And my father became very protective, but he would have been a strong father figure in any case, even if my mother had lived. And I think no question about it that if, that effect lasts until today. He's still living by the way. But I just could not face him if I did something that would embarrass my family. I just, I couldn't do that. I think it's very important to surround yourself with people who positively reinforce the good things, the positive values that you learned as a child. If you, as my father used to say, run with the wrong crowd, you'll wind up doing some things for which you'll probably regret. But yes, you really have to talk to yourself. You have to constantly tell yourself that no, you shouldn't do that or yes, you should do this and keep things in perspective. That's one of the big problems for athletes. You've got to keep things in perspective. RECAP

MR. LEHRER: Again, the major story of this Monday, President- elect Bush was among the millions of Americans who honored Martin Luther King on this national holiday to commemorate King's birthday. The slain civil rights leader would have been 60 years old yesterday. Good night, Robin.

MR. MacNeil: Good night, Jim. That's the Newshour tonight and we'll be back tomorrow. I'm Robert MacNeil. Good night.