Paying the Baker
FROM the clam-infested shores of Bran- ford, Connecticut, I reported to you in July that the Treasury Secretary, James Baker, had turned on an election winning boom for his old friend George Bush and would shortly leave the Treasury to head the campaign. It is now said that Mr Baker will have a twofold reward — to be Secretary of State, and not to have to go back to his old shop. Someone else can work out what to do about the twin deficits (budget and balance of payments) under an administra- tion pledged not to raise taxes and armed only with what Mr Bush, the great non- communicator, calls a flexible freeze. Someone else can decide how to pay for the savings banks — they are bust, the Federal corporation which insures them is bust, and the bill will be the biggest in banking history. Someone else can worry about the billions of debt being piled on rickety foundations as companies buy out their shareholders. The chairman of the Federal Reserve is audibly worrying — and, as he pushes up interest rates for good economic reasons, is adding to the finan- cial strains. No wonder Treasury ministers tend to think that a foreign policy job would be easier.
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