Raining On Baker's Parade

^ Secretary of State James Baker is renowned for keeping his boss out of deep doo-doo and never stepping into any himself. But Baker's surefootedness was notably lacking last week. In his first frantic foreign foray as the nation's top diplomat, the up-close-and-personal touch that has served Baker so well with Congress and the press did not play very well. And a new accord by five Central American Presidents caught the Secretary uncharacteristically off- stride.

Baker's most surprising slip last week was not realizing that Reagan-era ethical laxity is Out and more rigid Bush-era ethics are In. Four days after a story broke that he owned shares (worth $7 million in 1981 and an undisclosed amount today) in Chemical Bank New York Corp., which has huge loans to Third World nations, he announced that he would sell them. As Reagan's Secretary of Treasury, a qualified blind trust (whose owner knows what assets it contains, though he has no say in when they are bought and sold) was deemed sufficient. But after White House ethics chief C. Boyden Gray, who had also run afoul of the stricter rules, focused the zeal of the newly converted on the Baker portfolio (and conveniently deflected attention away from his own problems with the new rules), nothing short of complete divestiture would do.

Though Baker said the sale of the stock would have his grandfather "turning over in his grave," this was not a close call: there is no way for a Secretary of the Treasury to deal with Third World debt and not significantly affect the fortunes of Chemical Bank, and there is no way for a Secretary of State to steer completely clear of the issue. Harvard economist Jeffrey Sachs pointed out last week that after Baker refused to accept a Brazilian proposal that would have forced American banks to write down billions of dollars in debt in 1987, Chemical's stock rose nearly 40% in six months.

Otherwise, Baker was like someone on an all-you-can-visit tour, racing through 14 European capitals (not to mention Ottawa) in eight days. His visit was long enough for him to see that Western Europe is in the grip of Gorby fever: in response to Mikhail Gorbachev's disarming foreign policy, leaders there are awaiting something more substantive in the way of a U.S. response than the singing of Moscow Nights during the Soviet leader's White House visit.

Flying into Bonn, Baker vowed to find out "exactly what the German position is" on a U.S. plan for upgrading 88 Lance nuclear missiles (range: 80 miles), most of them based in West Germany, with new longer-range weapons. That is a touchy subject for West German Chancellor Helmut Kohl. Modernization has become a hot-button issue in German politics, and Kohl would like to postpone modernizing the weapons until after national elections in December 1990. Already Kohl's Christian Democrats have suffered thrashings in six recent local elections, and his government might not survive an unpopular pledge to accept new nuclear weapons. Bush will try to nudge Kohl into a compromise before the NATO summit this spring.