James Baker on the Return to Realism

White House Chief of Staff. Secretary of State. Treasury Secretary. James A. Baker has had most of the major jobs in the executive branch except the big one. He's long been known for the foreign-policy realism that characterized the presidency of George H.W. Bush, and the fraught recent history of interventionism has made Baker a Republican graybeard. He chatted with NEWSWEEK's Adam B. Kushner about the proper role for idealism in foreign policy, how to manage the peace process and how to survive the White House. Excerpts:

Kushner: How should President Obama manage the Israeli-Palestinian peace process?
Baker: You have to get Hamas involved, because you cannot negotiate peace with only half the Palestinian polity at the table. I would suggest an approach like we used leading up to the Madrid Conference in 1991. For the first time ever we got Israel's Arab neighbors—all of them—to negotiate face to face with Israel. How? Back then, we nor Israel could talk to the PLO because, like Hamas, it was a terrorist organization. So we negotiated with Palestinians from within the territories whom we and Israel knew were taking their orders from [Yasir] Arafat in Tunis. But we both had deniability, and it worked!

Should Obama engage Syria?
Yes, but with the caveats in the Iraq Study Group report. Syria's marriage with Iran is one of convenience, and if we assured them they would get back the Golan and normalized relations with the U.S., we might wean them from Iran. Hamas has its offices in downtown Damascus. The Syrians claim that they can get Hamas to acknowledge Israel's right to exist. If they can do that, you would then have 100 percent of the Palestinian polity, with whom you might negotiate a peace accord.

Was this Bush administration too accommodating toward Israel?
America will always be there for Israel, and we should be willing to enter into a security guarantee with Israel, to make it feel comfortable enough to negotiate peace; that's something this new administration should do. But the best thing we can do is to exhibit some tough love in a way that will encourage Israel to negotiate. You don't get peace from unilateral movement out of Gaza or anywhere else.

Your idea of tough love isn't telling them to vacate settlements?
There ought not be preconditions to picking up where other presidents left off. Surely there ought not be any more settlements, just like there ought not be any more rockets launched at Israel. Neither party should be allowed to create facts on the ground that foreclose the possibility of negotiation.

Since you left office, idealism has shaped policy from the Balkans to Iraq. What is its proper role?
You need to take into account both national interest and values. This is a huge principle, in my view: you cannot sustain any foreign policy that doesn't have a significant national interest because when the body bags start coming home you will lose support of the American people. It would be wonderful if we could go around the world and practice foreign policy according to the principles of Mother Teresa. But we can't! Why didn't we go into Rwanda during the genocide? Because we couldn't have sustained the policy.

Will Obama focus more on interests?
I've seen what Hillary Clinton said about pragmatism in her confirmation hearings, and I'm encouraged. "Pragmatism" should not be a dirty word. Pragmatism is getting things done, and it can be principled.

Russia and China both run interest-based foreign policies. How do you shape Russia's behavior when you can't get leverage?
We do have leverage over Russia. But it will never be back to what it was when I was secretary of state: communism collapsed, the Soviet Union imploded and Russian foreign policy was a mirror image of U.S. foreign policy. Today we need to cooperate with Russia where we can— including climate change, Iran's nuclear capabilities and trade. But where Russia takes actions adverse to our national interests—confront them! Sad to say there are some people in my party who regret the fact that we no longer have a big enemy out there. We won a lot of elections during the Cold War because we were the party of national defense and so forth. Some people want to re-create another enemy out of China or Russia. We're not going to agree with them all the time, but those countries are not our enemies today. But we could make them our enemies.

What does the new chief of staff, Rahm Emanuel, need to know?
I told him, "You've got the worst job in the government." He needs to understand that he may be the second most powerful man in Washington, but he's only staff. I said, "You're walking around with a big target painted on your front and your back. As long as you recognize that nobody elected you and they don't want to see or hear too much of you, you will do a good job."

You ran Treasury during the 1987 crash. Do you like the bailout and stimulus plans?
Yes. Three things. One, provision as much liquidity as you can. Two, coordinate our economic policies with our major trading partners. And three, do no harm: don't backslide on free trade and don't raise taxes in a recession.