JIM BAKER'S NEW ROLE MAY BE GOOD FOR DEMOCRATS

Yes, it's good for the Republicans that Jim Baker is back in control of the White House. He's worked his political magic in previous presidential campaigns. But it's also good for the Democrats.

Baker's return is appropriate in a curious way. More than any one other individual, he was the political architect of the '80s. As the Democrats perceive it, this election is about the failed policies of the Republican years: the weakening of our economy, the failure to respond to the challenge from Japan, the diminishing of opportunity for middle class Americans, and the profound neglect of pressing domestic problems.

Baker was at the center of the economic policy during the era of Reaganomics: Chief of staff for the first Reagan term, and Secretary of the Treasury for the second. He was present at the creation when the Bush economic blueprint was crafted. He was one of the principal architects of domestic policy that brought us to where we are today. For instance, the 1981 tax cut for the higher bracket folks met with Baker's enthusiastic blessings. The incurable deficits that came in the wake of that tax cut, he passes off to others.

He was there as the "superdollar" clobbered U.S. exports, sucked in imports, and allowed foreign companies to strengthen their hold on U.S. markets in key industries from steel to semiconductors. He was also chief of staff when the Garn-St. Germain legislation, deregulating the savings and loan, the most radical banking law in 50 years, was enacted and signed into law.

As secretary of treasury, he tried to correct for some of the excesses of the 1981 tax cut and to bring the dollar to a more reasonable level. He worked so hard on those issues, in fact, that he totally ignored the savings and loan scandal that was unfolding on his watch.

When he discovered there was a problem, he failed to act, letting it spin out of control. When he grasped what was happening, he locked it away in the attic to get through Bush's 1988 campaign. The Savings and Loan debacle makes teapot Dome look trivial in comparison. For many months, the treasury department knew that a calamity was in the making, but didn't act.

He took a serious, but still manageable, problem and by designed inaction turned it into the largest financial scandal in U.S. history: with a price tab of $500 billion that taxpayers will be paying for decades. The stench was at its worst in his home state of Texas. Half the savings and loans proved to be insolvent. Yet the lid was held on tight as could be. Early action was postponed in favor of secrecy. Political pragmatics prevailed over prudent policy. When Bush was elected in 1988, Baker abandoned the treasury department and left poor old Nicholas Brady holding the stinking bag.

No doubt Jim Baker is a talented political practitioner - one of the best around. He is talented at keeping his fingerprints off negative evidence. He is a master at blame avoidance and spin control. But with failed economics front and center, Baker may no longer be able to escape reckoning with history: he was on the bridge advising the captain when the good ship Reagan/Bush hit the economic reef.