John Cassidy's Blog, page 100

Dr. Kim and the Future of the World Bank

So President Obama's pick to head the World Bank wasn't Larry Summers, and it wasn't Susan Rice, and it wasn't Jeff Sachs. It was Jim Yong Kim, the president of Dartmouth College—a man most Americans have never heard of. That doesn't mean it was a bad choice. To the contrary, it might turn out to be an inspired one. But it does come with some queries attached.

Kim, a Korean-born physician and anthropologist who taught at Harvard Medical School, is a pioneering figure in building public-health delivery systems for developing countries. He was a co-founder of Partners in Health, a Boston-based non-profit organization that provides free health care to people in countries such as Haiti and Rwanda. Later, he held a senior post at the World Health Organization, helping scale up its efforts to deal with the H.I.V./AIDS crisis in Africa. (For more on Kim's record, see this post by Fred Hiatt, the editorial-page editor of the Washington Post, who is an old friend of Kim.)

From the White House's perspective, a mere recitation of Kim's résumé demonstrates one of the attractions of choosing him. At a time when many people around the world were saying that it was time for a non-American to head the Bank. Obama defied these calls. But rather than picking a banker, an economist, or a diplomat, he came up with an Asian-American doctor who is clearly on the side of angels, and therefore very difficult to oppose. With Kim's nomination, the candidacy of Ngozi Okonjo-Iweala, the Nigerian finance minister, which was formally announced this morning, is likely to fizzle.

That's the cynical political take. From a more substantive perspective, the choice of Kim also has a certain logic to it. In the past twenty years, the biggest change in the field of economic development and poverty reduction has been the integration of public-health initiatives with traditional lending programs. After fifty years of trying, we still don't know how to make countries like Eritrea and Burundi grow faster. But we do know how to reduce the incidence of H.I.V. and malaria: provide poor people with condoms and mosquito nets. With the rise of the Gates Foundation and other N.G.O.s focussed on public-health issues, the tactics pioneered by Kim and his colleagues at Partners in Health—such as recruiting and training local volunteers to deliver medicines and preventative care, rather than relying on expensive aid workers—have been widely copied and assimilated into official aid programs.

Sachs, who had been vigorously supporting his own candidacy for the Bank job without any encouragement from the Obama Administration, has been one of the most vocal supporters of this more holistic approach to economic development. When Kim's name was announced this morning, Sachs tweeted: "Jim Kim is a superb nominee for WB. I support him 100%. I thank all who supported me and know they'll be very pleased with today's news." Harvard professor Dani Rodrik, another prominent figure in debates about economic development, also welcomed Kim's selection, tweeting: "Re World Bank pick, it's nice to see that Obama can still surprise us."

If Kim's nomination goes through, as it surely will, barring something out of the blue—a gentleman's agreement between the U.S. and Europe means the former has always picked the head of the Bank—the tilt away from old-fashioned development projects and towards public-health initiatives will probably continue. But that is where some of the questions about this nomination arise. Kim won't be running the World Health Organization: he'll be running the World Bank. And the Bank, for all the changes it has undergone in the past couple of decades, is still fundamentally a lending agency—a lending agency that is rapidly running out of clients, because many formerly impoverished countries are now growing rapidly.

In a recent blog post, Todd Moss, a senior fellow at the Washington-based Center for Economic Development, pointed out that India, for many years the Bank's biggest borrower, is growing so rapidly that one day soon Delhi will no longer officially be a poor country, and that means it will won't qualify for loans from the International Development Association, the Bank's soft-lending arm. Many other recipients of money from the Bank, such as Vietnam, Ghana, and Sri Lanka, are also approaching middle-income status. In the next dozen years, according to calculations by Moss and his colleague Ben Leo, the Bank will lose more than half of its traditional clients.

What this means, Moss says—and many people inside the Bank agree with him—is that the Bank is facing an existential crisis that demands urgent answers to three questions:

How should the Bank operate in the 30 or so remaining low-income clients, nearly all in sub-Saharan Africa and mostly fragile or post-conflict states, the precise places where the Bank has had the least success?

In an age when capital is plentiful from private sources and new donors like China, how will the Bank continue to be relevant to its hard window and newly-graduated clients?

As shareholders push the Bank into new areas of global public goods, like spurring clean energy technology, how will the organization contribute?

Does Dr. Kim, whose expertise lies in medicine and in the administration of health-care systems, have any answers to these questions? Considering that for the past few years he has been busy managing Dartmouth through a big drop in its endowment, I doubt he has given them much thought. Now that he is heading for D.C., he will have to decide what he wants to do at the Bank, a famously unwieldy and bureaucratic institution, and how to go about it. His predecessor, Robert Zoellick, did a good job of stabilizing things after Paul Wolfowitz's disastrous tenure. But following the ruptures of that period, which culminated in an unprecedented rebellion by the board of directors, Zoellick was in no position to push through big changes or give the Bank a new mission. That task will fall to Kim.

The good news is he appears to be a quick study, a hard worker, and a good sport—as evidenced by this video, which has gone viral. (It shows him appearing as a rapping spaceman in the Dartmouth Idol contest last year.) All joking aside, everybody who cares about the fate of the world's poorest and most downtrodden people will be wishing Kim well.

Photograph by Ramin Talaie/Bloomberg/Getty Images.

Summers and the World Bank: Is Obama Serious?

Tomorrow is the deadline for nominations to the presidency of the World Bank. Now that the White House has made clear, via a leak to the Times, that it intends to defy international protests and insist on another American getting the post, one question is on everybody's lips: Is Larry Summers really going to be President Obama's choice?

The official word is that Summers's name is on a short list and no decision has been taken. But with other serious candidates, including Tim Geithner and Hillary Clinton, apparently having ruled themselves out of contention, the short list is very short. Apart from Summers, it is said to consist of two women: Susan Rice, the U.S. Ambassador to the United Nations, and Indra K. Nooyi, the C.E.O. of Pepsico. (John Seabrook wrote a profile of Nooyi for The New Yorker last year.)

Both Rice and Nooyi have experience of developing countries—during the Clinton Administration, Rice served as Assistant Secretary of State for African Affairs; Nooyi lived in India until she was thirty, and she runs a global multinational corporation with operations virtually everywhere. But neither Rice nor Nooyi has Summers's knowledge of the Bank—from 1991 to 1993 he served as its chief economist—or his personal ties to President Obama, whom he briefed virtually every day from the start of 2009 until the end of last year, when he left his post as head of the National Economic Council and returned to Harvard.

From the President's perspective, there are some compelling reasons to push forward with a Summers nomination and some compelling reasons not to pursue it. Here's quick rundown on both sides, starting with the arguments in Larry's favor:

1. Loyalty/payback. Summers served the President diligently for three tough years, and Obama, something of a neophyte when it came to economics, greatly appreciated his efforts. Peter Rouse, one of Obama's closest aides, said in a February, 2010, internal memo that Summers's "persona, credibility and expertise are extraordinarily helpful to the new president, and the president relies heavily on Larry's intellect and economic council." Rouse's memo, which Ron Suskind published in "Confidence Men," his juicy tell-all about the Administration, also confirms what many had suspected: "Larry accepted the NEC job, essentially a staff job, with the understanding it would be a short-term appointment." Apparently, Summers was hoping to be rewarded with the chairmanship of the Fed. But at the end of 2009, relying partly on the advice of Geithner, Obama decided to reappoint Ben Bernanke—leaving Summers miffed. Giving him the World Bank job would be a way of repaying him for his services.

2. Economic expertise. As former chief economist of the Bank, Summers is well-versed in debates about development and aid. Some of the things he did when he was at the Bank proved controversial—infamously, he signed a memo that said "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable." But when I interviewed some of Summers's former colleagues at the Bank for a profile I wrote of him in 1998, they were mostly complimentary. They said he encouraged open debate and original research. Despite being packed with economists, the Bank has never been led by one. Now that former academic economists run central banks in many countries, this will probably change.

3. Realpolitik. From a geopolitical perspective, the World Bank has always been seen partly as an agency of U.S. influence, and the Obama Administration apparently has no intention of giving up this leverage. Summers, on top of many other things, is a fierce defender and promoter of American interests. In his senior posts at the Treasury, he delighted in flying around the world and laying down the U.S. line to governments in Asia and elsewhere. (Not for nothing was the headline on my 1998 profile: "The Triumphalist.") At the Bank, he would presumably be a bit more diplomatic, but there would be no hiding his belief that the United States has much to teach the world.

4. Shock treatment. For years, there has been an inconclusive debate about what role the Bank should play in the new, globalized economy. Appointing Summers to the Bank would certainly give it an intellectual jolt. When, in 1967, Lyndon Johnson nominated Robert McNamara, his controversial Defense Secretary, many people thought he had lost his marbles. But McNamara, with his drive, his ambition, and his intellectual rigor, proved to be perhaps the best president in the Bank's history. What Summers would do in McNamara's shoes is anybody's guess. But he would certainly raise the Bank's profile and keep it in the news.

Now the arguments against Larry:

1. Domestic objections. Since the news emerged that he was being considered for the Bank, opponents of the idea have rallied against him. His longtime rival Jeffrey Sachs, who heads the Earth Institute at Columbia University, has been openly campaigning for the job. Last week, twenty-seven Democratic members of Congress, including John Conyers, Jr., of Michigan and New York's Jerry Nadler, wrote a letter to the President calling on him to nominate Sachs. Numerous liberal groups, including the Center for Economic Policy Research, are also supporting Sachs, as are three Nobel-laureate economists: Robert Fogel, Eric Maskin, and Edmund Phelps.

2. International objections. There has been a lot of coverage of the possibility of developing countries putting up a candidate of their own: two names mentioned have been Ngozi Okonjo-Iweala, the finance minister of Nigeria, and José Antonio Ocampo, a Columbia University professor who formerly headed the finance ministry and central bank in Colombia. The objection of the developing countries isn't to Summers specifically but to the idea of an American holding the job in perpetuity. Now some European governments are said to be objecting to Summers in particular. Agence France Presse reported, "Harvard University economics professor and former World Bank chief economist Larry Summers is seen as divisive by some key allies of Washington." The report quoted a source close the World Bank, who said, "Summers doesn't look like a candidate who will have strong support…. Apparently, he cannot gain the backing of all Group of Seven countries."

3. Management style. Summers has run two big institutions: the Department of the Treasury and Harvard University. As Treasury Secretary, from July, 1999, to January, 2001, he kept his ego in check and did a decent job, according to most accounts. At Harvard—well, you know that story. Five years into the job, following a vote of no-confidence in him by the members of the Faculty of Arts and Sciences, he was effectively forced to stand down. Complaints about his way of dealing with people followed him to the White House. As Rouse noted in his memo, "There is deep dissatisfaction within the economic team with what is perceived to be Larry's imperious and heavy-handed direction of the economic policy process."

4. Wall Street ties. Having strong links to the financial industry isn't anything new for a World Bank president. For years, it was virtually a qualification. Eugene Meyer, John McCloy, Eugene Black, George Woods, Alden Clausen, Lewis Preston, James Wolfensohn—they were all bankers. But times have changed, and in parts of the Democratic Party Wall Street is now a dirty word. Summers isn't a banker, of course, but he is associated with the financial industry and its lucrative remuneration practices.

As a Treasury official, he championed legislation to deregulate Wall Street that the big banks strongly supported. From 2006 until 2008, he was a part-time employee of D. E. Shaw, a big hedge fund, and in his second year at the firm he earned some five million dollars. It hasn't been widely reported, but late last year Summers rejoined the firm, this time as a consultant. According to a person familiar with Shaw, he is spending about five to ten per cent of his time working for the firm, largely in an advisory capacity. Asked what sort of things Summers does, this person said he addresses standard macroeconomic questions—such as the likelihood of a revaluation in the Chinese currency—and also advises the firm on how to limit risk.

So what will Obama do? My guess is he will play it safe and nominate somebody other than Summers. The obvious choice would be Rice, an African-American with an impressive resume and a long record of being interested in developing countries. (She wrote her Ph.D. dissertation on Zimbabwe.) However, there are suggestions that she is in line to take over as Secretary of State when Hillary Clinton leaves at the end of this year. Nooyi, who has spent her entire life in business, would be a more surprising choice, but it would probably be a well-received one around the world, especially in India. And, of course, there could be somebody else the White House has been keeping in reserve; we shall see, soon.

Photograph by Olivier Douliery/Corbis.

Illin' in Illinois: Romney Finally Finds his Voice

Evidently, one of the entrance requirements to the field of political consulting is that you have a self-serving cliché ready made for any eventuality. If your man (or woman)—be it Michael Dukakis in 1988, Barack Obama in 2008, or Mitt Romney this year—goes through a long and nasty nomination battle, the patter you trot out is that being pounded like a fence post for month after month made him (or her) a much stronger candidate. When Romney finally secures the job of taking on Obama in November—and after his easy victory in Illinois last night, it is looking like "when" rather than "if"—I'd lay a hundred to one odds that Eric Fehrnstrom, Tim Pawlenty, and the rest of his mouthpieces will be all over the airwaves peddling this reassuring argument.

Heck, the Mittster will probably make it himself. I can see it now: a sit-down with Brian Williams, Steve Kroft, or someone of that ilk. "Look, Brian: I'm a businessman, not a politician. Frankly, it took me a while to get accustomed to being the front runner in a national race. And I made some mistakes. But now that I've accumulated enough delegates for the nomination I'd like to thank former Senator Santorum and former Speaker Gingrich for forcing me to raise my game. I took some lumps, and it wasn't much fun at the time, but it has left me much better prepared to go head-to-head against President Obama and his billion-dollar campaign chest."

It will be mostly hogwash, of course. What nearly four months of trench warfare has really left Romney with is frighteningly high negative ratings from the independent voters he will need to win the White House; a depleted campaign bank account (doubtless he can refill it); and a number of hostages to fortune that the Obama campaign will be eagerly waiting to exploit—from his record at Bain Capital to his recent promise to defund Planned Parenthood. But last night, perhaps for the first time, the argument that Romney will be a better candidate for what he's been through didn't sound completely outlandish—not for the fifteen minutes, or so, while he was speaking, anyway.

Introduced on the eve of his forty-third wedding anniversary by his wife Ann, who is emerging as his not-so-secret weapon in the campaign to win over women voters—and Americans of both sexes who still harbor suspicions that her husband may actually be a robot built and programmed by some Silicon Valley whizz kids in the employ of Karl Rove—Romney gave what was probably his best speech of the campaign. He started off woodenly, as he always does, and he stepped on a couple of his lines, including a zinger about Obama's recent references to Bill Gates and Steve Jobs. But his focus on drawing a contrast with Obama was relentless, and, for once, he sounded as if he genuinely believed what he was saying—or, at least, that he genuinely believed he could leave such an impression.

Here, for the first time since the televised debates last fall, was the Romney that Rove, Fred Malek, Ed Gillespie, and other G.O.P. panjandrums have been pinning their hopes on. Yes, he was talking from a teleprompter—Rick Santorum needled him about that later on, from Gettysburg, Pennsylvania—but that hasn't aided him much in the past. On this occasion, it appeared to help him pace himself, as he sought to criticize Obama's record on the economy and contrast it with his own. "For twenty-five years, I lived and breathed jobs, business, and the economy," he said. "I had successes and failures but each step of the way, I learned a little more about what it is that makes our American system so powerful. You can't learn that teaching Constitutional law. You can't learn that as a community organizer."

The speech didn't exhibit much purchase on reality—Romney depicted himself as a job-creating wizard rather than the financial engineer he actually was—nor did it contain much in the way of actual proposals. But truth and substance weren't the metrics the Mittster was measuring himself against last night. His task was to sound some overall campaign themes for the fall, and to give the G.O.P. faithful hope that he might actually be able to mix it up with Obama. Judged in those terms, he succeeded.

Romney pilloried Obama's policies pretty much across the board; that was to be expected. But he also tied his critique to traditional G.O.P. rallying cries of optimism and liberty. "The simple truth is that this President just doesn't understand the genius of America's economy—or the secret of our success," he said. "The American economy is fueled by freedom…. But, over the last three years, this Administration has been engaged in an assault on our freedom." Romney blamed the tepid recovery on the President's job-killing bureaucrats and regulations. ("His regulators would have shut down the Wright Brothers for dust pollution.") He blamed high gas prices on the President's environmental policies. ("Once we built the interstate highway system and the Hoover Dam. Now we can't even build a pipeline.") And he uttered some commendably short and declaratory sentences, such as this one: "I'm running for President because I have the experience and the vision to get us out of this mess."

A speech is just a speech, of course. Come Saturday, Romney will be back in the mire, this time in Louisiana. But as I said in a post a couple of days ago, the importance of a big win for him in Illinois shouldn't be underestimated. Just a couple of weeks ago, it seemed perfectly possible that Santorum would storm out of the South and mount a serious challenge. Largely due to the enormous imbalance in financial resources between him and Romney, this didn't happen. According to the exit polls, about the only voting groups Santorum led in were the poor (people who didn't attend college and earn under thirty-thousand dollars a year), the very conservative, and the very religious. If yesterday's result didn't quite seal the nomination for Romney—and it didn't—it surely proved, once and for all, that Santorum can't win it.

All in all, then, the best night Romney has had in ages, capped by the Chi-Town dog that didn't bark. For months now, David Axelrod, President Obama's campaign aide, has kept up a running commentary on the Mittster's missteps via Twitter. Last night, nothing. Finally, just before midnight, the Axe posted this tweet: "Mitt's SuperPac enjoys pounding Santo so much they just ran a negative ad on CBS in Chicago-more than 3 hours after the polls closed!"

There's an old truism in American politics. When your opponent is complaining about how much money you have spent, you know you are getting to them.

Photograph by Scott Olson/Getty Images.

How Long Will the Cult of Apple Endure?

Watching all the fuss on Monday about Apple's announcement that it will soon start paying a dividend and buying back some shares, it occurred to me, not for the first time, that the Cupertino-based gadget manufacturer isn't a corporation in the normal sense of the word: it's a worldwide cult. If more evidence were needed, witness the long lines that formed outside Apple stores late last week to purchase the new iPad, which, whisper it softly lest you get stomped on in the rush, isn't much different from the old one.

What other company could dominate a day's news simply by saying it plans on distributing directly to stockholders perhaps a quarter of the profit it generates? If it were any company other than Apple, that story would be confined to the business section. It's not as if the sums involved are mind-blowing. Relative to Apple's revenues, which could well total upwards of $150 billion this year, a $10 billion dividend payout is small beer. Compared to the U.S. economy at large—the G.D.P. recently passed fifteen trillion dollars—it is a rounding error.

Moreover, despite the fact that Apple's stock price rose on Monday, the announcement isn't necessarily positive news for the firm's long-term future. Technology companies start distributing cash to their investors only when they can't think of anything better to do with it. For years, Google and Apple made it a point of pride that they didn't pay a dividend—why waste money on the stockholders that could be used to create fabulous new products? Google, which is now capitalized at barely a third of Apple's valuation, still doesn't pay a dividend.

In ditching this policy, Tim Cook, the successor to Steve Jobs, is acknowledging what Microsoft acknowledged to some extent nearly ten years ago when it started paying dividends, and more seriously three years ago, when it raised its annual payout substantially: it is now generating so much cash that it can't hope to reinvest it all productively. Rather than let the money fester on the balance sheet, the company might as well hand over some of it to its rightful owners.

In the short run, that is good news for Apple stockholders—hence the rise in the company's stock price yesterday, to more than six hundred dollars a share. The company is enormously successful and profitable. (In the most recent quarter, it earned about $13 billion on revenues of $46 billion.) It is also testament to the enduring competitive advantage that the United States enjoys in high-tech. With Apple, Google, Facebook, and the like leading the way on all five continents, predictions of American economic decline look a bit premature.

That all said, I think it is perfectly reasonable to ask how long Apple can continue its all-conquering run of success. In the iPod, the iPhone, and the iPad, it has put together perhaps the most remarkable triptych of commercial successes in the recent history of consumer products. About the only parallel I can think of is from the movie industry—the original "Star Wars" trilogy—and that isn't a very good one. Apple's gizmos aren't just cleverly designed computers: as the lines last week indicated, they are socioeconomic and cultural signifiers. Even when it turns out that some of these very same products are produced in sweatshop conditions redolent of nineteenth-century Manchester, many smart, affluent, and educated people want to be seen sporting them. Sorry, that is an understatement. They absolutely have to have them.

What this attitude says about "smart, affluent, and educated" people I will leave for you to ponder on your coffee break. Here, I am more concerned with how sustainable it is. For any fashionable purveyor of consumer goods, be it a rock band, a clothing line, or a cell-phone manufacturer, retaining the label of "cool" is the hardest thing of all. And if Apple were ever to lose that label, it would also shed much of its ability to charge premium prices and extract monopoly rents.

On the plus side, Apple boasts a dominant position in two of the fastest growing areas in the economy—mobile communications and tablet computing—and it also has powerful network effects working in its favor. Once you expend the money and effort to join the Apple ecosystem, the thought of leaving it isn't pleasant to contemplate. Do you want to convert the older songs and movies in your iTunes library to another format? Of course you don't. For nearly two decades now, Microsoft has been relying on prohibitive "switching costs" to protect its Office franchise. Despite the development of the Internet and the rise of so-called "cloud computing," it's still more or less intact.

But protecting an existing franchise is different from growing it and expanding it into new areas, which is what Apple has been doing with startling alacrity since it released the iPod in 2001. Just five years ago, the company's revenues were less than $25 billion. By the end of this year, they will have risen six-fold. For Apple to repeat this trick, it would have to generate revenues of close to a trillion dollars in 2017. Is this conceivable? Yes. Is it inevitable? For at least two reasons, I don't think so.

1. Competition: Apple's enormous profits are an invitation to every other company in the industry to enter its markets and try and chisel some of them away. From Google's Android operating system for mobile phones to Microsoft's upcoming Windows 8 operating system, which will supposedly be optimized for tablets, the competition is intensifying. But what would really threaten Apple is not so much a nifty new slate or cell phone, but the introduction of truly disruptive technology—be it a wearable computer, a robot to help with housework, or whatever—by another company. In following up the iPod with the iPhone and iPad, Apple introduced three disruptive technologies in a row—an achievement that will go down in business history. But can it keep it up? If and when something comes along that is cooler than the latest gizmo from Cupertino, Apple is potentially in trouble.

2. Diseconomies of scale: A.k.a. the curse of getting too big. Since the industrial revolution, virtually every successful company has eventually succumbed to it. Why would Apple be any different? Some types of diseconomy are internal. Particularly in the absence of Steve Jobs, how long can Apple maintain the culture of innovation and excellence that has propelled it to this position? There are also external diseconomies that are beyond the company's control. As Apple gets bigger and bigger, there are sure to be growing calls for its power in the market to be curtailed. A couple of years ago, there were stories about a possible Microsoft-style anti-trust investigation, which would examine Apple's policy of requiring software developers who make apps for its products to use Apple's own programming tools. More recently, there have been stories about the Justice Department confronting Apple and a number of big publishers over their efforts to control the price of e-books. That is only the beginning.

I am not suggesting that Apple is going to stumble today or tomorrow. Given the company's growth rate, its reservoir of engineering and marketing talent, and the worshipful coverage that much of the media affords it, I wouldn't be surprised to see its stock hit $1,000 later this year or next. With a historical price-earnings ratio of seventeen and a prospective ratio of twelve, you can even make the argument that the shares are reasonably cheap. But if the stock did hit $1,000, I would be a seller.

Even in the presence of economies of scale—of which, network effects are one particularly powerful type—experience suggests that companies don't get bigger and bigger without bound. The recent history of technology is littered with dominant monopoly franchises that appeared to be permanent but turned out to be temporary. During the nineteen-sixties and seventies, IBM looked invulnerable. In the nineteen-eighties and nineties, Microsoft replaced Big Blue as the dominant player. For coming up on a decade now, Apple has been the industry trendsetter and cultural avatar.

Something tells me that history doesn't stop here.

Photograph by Victor J. Blue/Bloomberg via Getty Images.

Five Reasons for Romney to Be Cheerful

Things are looking up in Romney-land.

Following the Mittster's four-to-one win in Sunday's Puerto Rico primary, which ensured him another twenty delegates, Public Policy Polling is predicting a "blow-out victory" for him tomorrow in Illinois, the country's fifth most populous state. P.P.P.'s latest survey of Illinois Republicans, which was carried out over the weekend, shows the G.O.P. front runner with a fifteen point lead over Rick Santorum, forty-five per cent to thirty per cent.

Even David Axelrod, who never has a good word to say about the likely Republican candidate, thinks he's unstoppable. "With a 7-to-1 spending edge, hard to see Mitt not rolling in IL tomorrow," the Axe, who is based in Chicago, tweeted this morning. "You can't turn on the TV without seeing 2 or 3 neg ads on Santo." In a second tweet, Axelrod went on: "The Mittzkrieg in Illinois isn't terribly inspiring, so turnout may lag. But the sheer volume probably has been grindingly effective."

Santorum appears to be giving up hope of turning around Illinois. This morning, his campaign said he would be spending at least part of tomorrow in Pennsylvania. Even if Romney roughs him up in Illinois, his campaign will still have high hopes of winning the Louisiana primary, which takes place Saturday. However, that doesn't mean a big Romney victory tomorrow wouldn't have much import. For at least five reasons, it would be very significant.

1) Momentum: So far, March has been a tough month for the Beantown buyout tycoon. Although he came out ahead in seven of the twelve states that voted on Super Tuesday, big losses in Georgia, Oklahoma, and Tennessee, and a near-tie in Ohio, dominated the headlines. A week later, Santorum took Alabama and Mississippi, overshadowing Mitt's victories in Hawaii and American Samoa, and sparking talk of a brokered convention. A big win for Romney tomorrow could change this narrative. For once, he would have exceeded expectations. In the media battle, that counts for quite a bit.

2) Geography: With Illinois in the bag, Romney would have prevailed in three big states on the Great Lakes—Illinois, Michigan, and Ohio—giving lie to the argument that he can't win over Republicans in the middle of the country. To be sure, he would still have a significant problem in the South, but that's strictly a primary issue. Once we get to the general election, G.O.P. voters in states where he has done badly—Alabama, Mississippi, Oklahoma, etc.—aren't going to defect to the Democrats.

3) Psephology: The best argument for Mitt has always been that come the general election he would be the Republican candidate best placed to win over urban and suburban voters who have conservative inclinations, especially on economics, but who may be put off by the G.O.P.'s transformation into a party of culture warriors. Illinois is full of such people. About sixty-five per cent of the state's population resides in the Chicago metropolitan area, which includes populous outlying counties such as DuPage, Kane, and Will. And sure enough, the G.O.P. voters in these areas appear to be supporting Romney in big numbers.

According to the P.P.P. poll, he has a twenty-one point lead over Santorum (fifty-one per cent to thirty per cent) among likely Republican voters who live in suburban areas, and a twenty-three point lead among G.O.P. voters who live in urban areas. (He's also got a two-point lead among voters in rural areas, which are usually Santorum strongholds.) Among G.O.P. voters who describe themselves as "somewhat conservative," he's leading Santorum by a whopping forty points: sixty per cent to twenty per cent.

4) Delegates: Sixty-six of them are at stake in Illinois. If the latest polls prove accurate, Romney could end up winning close to forty of them, which would take his delegate count to about five-hundred and sixty. That would be still less than half the total he needs to take the nomination on the first ballot—1,144—but it would put him about three hundred delegates ahead of Santorum.

With such a big lead, Romney's campaign would be able to argue persuasively that Santorum has little or no chance of winning the nomination, and that a vote for him merely extends the bruising primary process, to Obama's benefit. To many moderate and moderately conservative G.O.P. supporters, this might well seem like a winning argument.

5) Scheduling: Once Louisiana is out of the way, the primary timetable becomes more favorable to Romney. On April 3, there are votes in Maryland, Wisconsin, and the District of Columbia. Santorum will be hoping to win the first two states, although he's far from a sure thing in either place. In D.C., he's not even on the ballot. Then there is a three week break before the primaries in Connecticut, Delaware, New York, Pennsylvania, and Rhode Island. If Romney could sweep the Northeast except for Santorum's home state of Pennsylvania, he would be looking very good.

Of course, he's looked good several times before—only to suffer another setback at the hands of those ornery G.O.P. voters each time. But since it's the start of a new week, let's be charitable towards him. Tomorrow looks like it might be his biggest day since he scored a comeback T.K.O. over Newt in Florida.

Photograph by Chip Somodevilla/Getty Images.

An Inconvenient Truth: It Was George W. Bush Who Bailed Out the Automakers

Joe Biden is right about the auto bailout. There was a President who bucked a public outraged about the Wall Street bailout, and loud criticisms from within his own party, to make an unpopular decision that ended up saving tens of thousand of jobs and putting Detroit on the road to recovery. Biden, in his rousing campaign speech in Toledo, Ohio, on Thursday, was also right about Mitt Romney, Rick Santorum, and Newt Gingrich when he criticized them for refusing to support the auto bailout back in 2008 and 2009. In putting dogma and electoral calculus before the national interest, the Republican candidates acted like craven politicians rather than national leaders.

At the end of 2008, General Motors and Chrysler were bleeding billions of dollars a month, and nobody in the private sector wanted to lend to them. Even the supposedly liberal Brookings Institution put out a report saying they should be allowed to go bust, with their factories and machinery being sold off to the highest bidder. Today, things look very different. A few weeks ago, General Motors reported that it made $7.6 billion in profit last year. Even Chrysler, which is now controlled by Fiat, made money in 2011. So Biden was telling the truth when he said, in reference to the Republican candidates, that the President "made the tough call… [he] was right, and they were dead wrong."

The only problem with Biden's history lesson is that the "man with steel in his spine" he referred to should have been George W. Bush, not Barack Obama. Lest we forget, it was Bush rather than Obama who initiated the government rescue of the auto companies.

On December 19, 2008, a week after Republicans in the Senate had killed a bailout bill proposed by Democrats, saying it didn't impose big enough wage cuts on the U.A.W., Bush unilaterally agreed to lend $17.4 billion of taxpayers' money to General Motors and Chrysler, of which $13.4 billion was to be extended immediately. He had to twist the law to get the money. Deprived of congressional funding, he diverted cash from the loathed TARP program, which Congress had already passed, but which was supposed to be restricted to rescuing the banks. "I didn't want there to twenty-one-per-cent unemployment," he said to a meeting of the National Automobile Dealers Association in Las Vegas last month, explaining why he acted as he did. "I didn't want history to look back and say, 'Bush could have done something but chose not to do it.' "

Obama, who in December, 2008, was the President-elect, publicly supported Bush's move, saying it was a "necessary step to avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers." After taking office six weeks later, Obama put together an auto task force that extended tens of billions more in emergency financing to Detroit over the ensuing months, and also did what appears to have been a pretty good job in restructuring G.M. and selling Chrysler to Fiat.

Obama deserves a lot of credit for finishing the job that Bush and his Treasury Secretary, Hank Paulson, had started. He stood with the auto companies, which were victims of extraordinary circumstances beyond their control. As the price of the bailout, he also insisted on some changes at G.M., including the installation of new leadership and the elimination of several brands.

But that hardly justifies writing Bush and Paulson out of history, which is what the Obama campaign appears to be doing—in Biden's speech and in "The Road We've Traveled," a glossy new documentary about Obama's tenure by David Guggenheim, the maker of "An Inconvenient Truth," which the campaign released on Thursday. Biden didn't mention Bush's role at all, and Guggenheim's film reduced it to one sentence: "The Bush Administration had given the car companies thirteen billion dollars, and the money was now gone."

Speaking on Lawrence O'Donnell's MSNBC show, Guggenheim explained that in making his documentary about Obama he said to himself, "Let's look [at] this term. Let's look at the really tough choices he made…. Time and again, you see him looking beyond the short-term political exigencies." Maybe you do. But does bailing out the auto companies really qualify as one of these occasions? Given that Bush had already extended billions of dollars of taxpayers' money to G.M. and Chrysler; given the residual influence of the U.A.W. and other unions inside the Democratic Party; and given the fact that Obama had supported the highly unpopular bailout of Wall Street banks, how could he have turned around and argued that the auto industry, still the biggest manufacturing industry in the country by far, didn't deserve rescuing? Politically speaking, ponying up more money was the least uncomfortable option for the new President to choose. As it happened, it was also the right thing to do, and we should be all grateful that he did it.

Bush, of course, was a lame-duck President by the time he decided to rescue G.M. and Chrysler. With Texas and retirement beckoning, he had the freedom to act as he thought best. But when Paulson and Ben Bernanke urged him to use money from the TARP program he still had to overcome his own free-market instincts. "Sometimes circumstances get in the way of philosophy," he said in Las Vegas. "I would make the same decision again."

In bailing out the auto companies, Bush earned the lasting enmity of many on the Tea Party/crackpot right, who regard him as a traitorous big-government Republican. And given the anger felt toward him by many liberals and progressives, the decision to intervene didn't earn him much credit on the left, either.

That, perhaps, was inevitable. But let's at least acknowledge what he did.

Photograph by Madalyn Ruggiero/AP Photo.

Why is Goldman Sachs so Goldmanesque?

One popular theory, which I heard the Times columnist Joe Nocera expounding on the radio yesterday, is that it all goes back to 1999, when the firm issued stock to the public. As an old-school Wall Street partnership, this story goes, Goldman valued its reputation too highly to get involved in some of the shenanigans that it has gotten mixed up in recently, and it could also afford to take the long view. Once it became a public company, however, it came under pressure to raise its earnings every quarter. And this encouraged it to put short-term profits before anything else, including the best interests of its clients.

Obviously, there's something to this theory. Whenever a Wall Street firm like Goldman has a couple of disappointing quarters, its stock price suffers, and there are calls for changes in leadership, especially if its rivals are doing well. Thanks to its Vampire Squid business model, Goldman has rarely found itself in such a position. Even today, its stock trades at a premium compared to many other big financial firms, such as Morgan Stanley and Citigroup.

But going public doesn't fully explain the transformation that Goldman has undergone during the past couple of decades. Almost all the old Wall Street partnerships, starting with Donaldson, Lufkin & Jenrette, issued stock in the seventies and eighties. Goldman was a holdout. Today, almost every firm on Wall Street is a public company. But you don't hear some of them, such as Lazard Freres and Evercore, being accused of self-dealing to the extent you do with Goldman. Why is that?

One obvious difference is size. Evercore (ticker symbol "EVR"), the investment-banking boutique that Roger Altman founded in 1994, has about a billion dollars on its balance sheet. Goldman Sachs ("GS") has more than nine hundred billion. You read that right: Goldman is about nine hundred times bigger than Evercore. Lazard is a bit larger than Evercore, but not much. It has some three billion dollars in assets, meaning that Goldman is about three hundred times bigger.

Of course, Evercore and Lazard aren't really in the same business as Goldman. To be more precise, they are players in but two of Goldman's many businesses: advising companies and rich individuals about how to deploy their money—investment banking (strictly defined) and asset management. Neither of these business lines demands large amounts of capital: the firm is selling its expertise rather than its financial heft. And they can both produce healthy profits. Over the past five years, the stock prices of Evercore and Lazard have handily outperformed Goldman's stock price.

About eighteen months ago, when I was working on my magazine piece "What Good is Wall Street?," I interviewed Evercore's chief executive, Ralph Schlosstein, who worked at the Treasury and the White House during the Carter administration, and asked him about the transformation from small Wall Street firms—during the nineteen-eighties, firms like Goldman and Lehman were roughly the size that Evercore is today—to multinational corporations with huge balance sheets. As investment banks get bigger and bigger, Schlosstein explained, their internal culture and their senior personnel inevitably change. "The leadership of these firms tends to go towards people who can deploy their vast amounts of capital and earn a decent return on it," Schlosstein said. "That tends to be people from the trading and capital-markets side."

Schlosstein wasn't referring to Goldman in particular. Richard Fuld and John Mack, the heads of Lehman and Morgan Stanley during the boom years, both started out on the trading and sales side. But Goldman is the quintessential example of a firm that evolved from a smallish investment bank into a huge trading house. And Lloyd Blankfein and his sidekick Gary Cohn are quintessential traders. (Blankfein started out trading gold, Cohn silver.)

With a balance sheet of a trillion dollars and the trader's mentality in control, abuses are virtually inevitable. Old-school stockbrokers and investment bankers shouldn't be mythologized. Insider dealing and other swindles were common during the ancien régime, and, as the Raj Rajaratnam scandal indicates, they still go on. But brokers and bankers both operate in an environment where they have a legal duty to protect the interests of their clients. At times, they might violate it, but they know it exists.

Traders are different beasts. As anybody who has read Michael Lewis's "Liar's Poker" knows (and if you haven't, you should—even though it's more than twenty-five years old), trading is different. The first rule of trading is caveat emptor. Yes, you make all the obligated legal disclosures—or, rather, the firm's lawyers do the job—and then it's every man for himself.

And to some extent, that's O.K. By now, everybody knows the rules of engagement, or they should. It's fair to assume that the "muppets" Greg Smith's colleagues referred to weren't glove puppets. They were traders at other banks and financial institutions. In choosing to contract with Goldman, these people knew they weren't dealing with the Salvation Army.

But still. The economic rationale for banks (investment banks or commercial banks) is that they help to direct savings into productive investments. Goldman and the other big banks/trading houses do a bit of that, and even some of their trading—in facilitating liquid markets for things like stocks and bonds—is socially productive. But they also do a lot of stuff that has little or no social utility and can have big negative consequences for the rest of the economy—cf C.D.O.s, C.D.O.-Squareds, C.D.S.s, etc.

It is this, rather than any comments about "muppets," or "ripping the face off" trading counterparties, that is the real rationale for limiting the size of Wall Street firms—something the recent financial reforms conspicuously failed to address.

Photograph by Mario Tama/Getty Images.

Why Republican Women Vote for Santorum

As I noted earlier, one of the most fascinating aspects of the primaries in Alabama and Mississippi was that in both states Rick Santorum got more votes from women than Mitt Romney did—this despite his views on abortion and contraception. So why did so many Republican women vote for Santorum? Here is an interesting contribution from one of the commenters on my earlier post:

About women supporting Santorum: I too find this baffling, and can only attribute it to some form of Stockholm Syndrome. As someone who grew up among born-again and evangelical Christians in Appalachia, I would hypothesize that women who have accommodated themselves to living an evangelical lifestyle have nothing to gain from questioning the premises of Christian patriarchy. Their lives are more comfortable, less fraught with domestic conflict, if they simply decide to be happy and make the most of their assigned roles. Although to a feminist the trajectory of their lives seems constrained, on a day-to-day basis evangelical women feel productive and empowered by playing a dynamic role in their churches and schools, from which they derive a potent sense of community. Nor are they necessarily barred from having a job. They have avenues for self-expression such as crafts, baking, or book clubs. (If your first reaction is to disdain these, then unless you're a professional artist you probably have too high an opinion of your own creative outlets.) In fact, when I recall the women I grew up under, they didn't think men were superior at all; they took the patronizing attitude that men were to be indulged in their masculine delusions. It would be elitist/snobby/condescending/wrong to view such women as passive or merely subservient. How many of us want to challenge the social constructs within which we have created active lives that are reckoned as meaningful? At any rate, this is my best effort to make sense of the women's vote, which is otherwise unfathomable and preposterous to me.

—CWolfe

The Goldman Bomb: Will Blankfein Survive?

From one perspective, Greg Smith's scalding Op-Ed in today's Times, in which he accuses his now former colleagues at Goldman Sachs of gleefully "ripping off" clients—known as "muppets" to some at the firm, he says—contains little that is new.

For years, virtually everybody on Wall Street and beyond has known that the white-shoe partnership turned global financial behemoth is hopelessly conflicted. That was what the S.E.C.'s 2010 lawsuit against the firm was all about. The government accused Goldman of conspiring with one client (John Paulson's hedge fund) to rip off others (a variety of banks), while enriching itself in the process. When the S.E.C. settled the case for just $285 million, I though it was an outrage, and when, in November of last year, Judge Jed S. Rakoff, of the U.S. District Court, blocked the settlement, I applauded his move.

What is new, of course, is that the accusations against Goldman are now coming from within. In more than twenty-five years of following and writing about the firm, I have watched it go through innumerable scandals—from its part in the Robert Maxwell affair to its role as an adviser to the Greek government—and never in all that time have I seen anybody from the firm break ranks like this:

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money…. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

And like this:

I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave….

I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It's purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client's success or progress was not part of the thought process at all.

And like this:

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as "muppets," sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God's work, Carl Levin, Vampire Squids? No humility? I mean, come on.

So, at last, the truth is out.

I'm not sure what, if anything, the firm can do about this disaster. And let's be clear, it's not just a public-relations nightmare: it's a big threat to Goldman's business, which, as Smith points out, has evolved gradually over the past twenty years. Other big Wall Street firms, such as Morgan Stanley and J.P. Morgan, have similar conflicts of interest. They, too, are often to be found on both sides of a given deal. But no other firm has been as aggressive or as shameless as Goldman.

Back to Smith again:

How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? a) Execute on the firm's "axes," which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) "Hunt Elephants." In English: get your clients—some of whom are sophisticated, and some of whom aren't—to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don't like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Smith ended his article by writing, "I hope this can be a wake-up call to the board of directors." That's another way of saying: wake up, guys, and fire Lloyd Blankfein and his cronies—they are destroying the firm.

Given the iron grip that Blankfein exercises on Goldman, I don't think this is going to happen, at least not for a while. But even he must realize that the take-no-prisoners business model he has championed—he didn't invent it: Goldman was becoming increasingly brazen even before it went public—is now backfiring.

And what is the easiest way to change perceptions of Goldman? Change its leadership.

In a memo sent to Goldman employees today, Blankfein and fellow executive Gary Cohn attempted to respond to Smith by saying that what he wrote was unrepresentative of the firm as a whole. "Needless to say, we were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients," they said. You can read the full version here. Needless to say, it won't generate nearly as much attention as the Op-Ed that prompted it.

Photograph by Brooks Kraft/Corbis.

Southern Gothic: Will Santorum's Win Send G.O.P. to a Brokered Convention?

Roll up, folks! Roll up! The great G.O.P. circus is only getting going.

After yet another remarkable night, which started out with Mitt "Bubba" Romney telling Wolf Blitzer that Rick Santorum was "at the desperate end of his campaign" and ended with a defeated but unbowed Newt Gingrich congratulating Santorum on his two victories and raising the prospect that Romney could be run out of Tampa at a brokered convention, only a fool would predict what will happen next.

But a couple of things bear remembering.

First, Alabama and Mississippi remain two of the most conservative states in the country. Second, Rick Santorum is the most conservative candidate in the G.O.P. field. For a man who has questioned the science of global warming and the morality of birth control to win a plurality of the vote in two states where, according to an election-eve survey from the research firm Public Policy Polling, almost two in three Republicans don't believe in evolution and almost one in two think Barack Obama is a Muslim, shouldn't have been so surprising.

It was, though—particularly the result in Mississippi, where a series of favorable polls had led Romney, his establishment backers, and many commentators (but not this one) to believe he could pull off a surprise victory. CNN's exit poll only added to Team Romney's hopes. Initially, it showed the Mittster with a five-point lead over Santorum—thirty-five per cent to thirty per cent. By the time the actual votes had been counted, those figures had been reversed, and Gingrich had edged Romney into third place, something he also managed to do (just) in Alabama.

Consequently, when Rick Santorum took the podium in Lafayette, Louisiana, there was something different about him. Gone was the fresh-faced jaycee, the slightly grown-up version of Michael J. Fox on "Family Ties," that we had seen on his previous big nights—in Iowa, Minnesota, and Tennessee. In place of this happy-go-lucky Presidential tyro, there was a sombre-faced fellow who, as he thanked his family and his God for giving him the strength to get up and go every day, appeared to be all of his fifty-three years.

Had Santorum realized, quite possibly for the first time, that he now had a serious shot at the nomination? That's what it looked like. "We did it again," he said simply. And it was true. In the Deep South states, as in Iowa, Colorado, Tennessee, and almost every other state where he was won, the Romney forces had outspent him heavily—by between three and eight to one depending on which expert you believe. In Mississippi, Romney also had received the vigorous endorsement of almost the entire G.O.P. establishment, plus the use of its extensive get-out-the-vote organization. A lot of good it did him. Shortly after ten o'clock (eastern time) Henry Barbour, nephew of Haley, the former Republican governor and uber good ol' boy, tweeted: "Madison Co. 100%—metro Jax—Nice % for @MittRomney, but turnout is killing us. 7658 votes total and should be 12-14K."

If the God-fearing burghers of Jackson and other cities in Mississippi and Alabama were somewhat reluctant to go out and vote for a multimillionaire Massachusetts Mormon who discovered grits last week, many of their downscale rural neighbors were having none of it. In a replication of what is now the established pattern, the CNN exit polls showed that Romney had failed to come out on top, in either Alabama or Mississippi, in the following voting groups: men, people under the age of forty-four, people without a college degree, people who earn less than a hundred thousand dollars a year, Tea Party supporters, self-identified conservatives, and evangelicals.

Adding to Romney's troubles in attracting the not-rich, the not-elderly, and the not-very-well disposed to Mormons, he also managed to lose the female G.O.P. constituency, which he has won elsewhere. In Alabama, according to the CNN poll, Santorum got thirty-seven per cent of the women's vote, and Romney got just thirty per cent. In Mississippi, it was closer, but Santorum still squeaked out ahead: thirty-five per cent to thirty-four per cent. How could Romney lose out among women to a candidate that virtually the entire mainstream media regards as an enemy of women's rights? That was but one of many questions that remained unanswered at the end of the night.

Since Romney didn't appear at all—never a good sign—nobody could ask him about this, or anything else. Eric Fehrnstrom, one of his flacks, popped up on CNN, but once he started talking about the importance of Hawaii and American Samoa it was clear that Team Romney was officially taking a powder from Southern Tuesday.

Who could blame it for wanting to flee? Following Santorum's triumphs, the next logical step would be for Newt Gingrich to drop out and allow him to try and unite the anti-Mitt forces in Illinois next Tuesday and in Lousiana a week on Saturday. (In his speech, Santorum tried to nudge Gingrich in this direction, saying, "The time is now for conservatives to pull together.") If Romney were to lose Illinois, where his lead over Santorum is just four points, according to a Chicago Tribune poll that was published late last week, all hell would break lose.

In Florida and Michigan and Ohio, Romney held the line against the conservative insurgency. Now he has to do it all over again. If he doesn't manage it this time, Gingrich won't be the only one talking about a brokered convention. A Santorum victory in Illinois would upend all the reassuring calculations about Romney eventually accumulating the thousand one hundred and forty-four delegates he needs for the nomination, and all manner of crazy scenarios would merit consideration. (Jeb Bush or Chris Christie as a White Knight? A Santorum/Gingrich conservative dream ticket? Some sort deal between Romney and Ron Paul?)

About the only good news for Romney last night was that Gingrich and his wife, Callista, still appeared to be inhabiting a different planet from the rest of us. After it had become clear that Mr. G. was going to lose two states he most certainly should have won, Mrs. G., a vision in red, introduced him to a surprisingly buoyant (drunk?) crowd in Birmingham, Alabama, saying, "Please welcome the former leader of the House and the next President of the United States."

For his part, Gingrich reiterated that he would be campaigning all the way to Tampa, where he predicted that Romney would fail to get the delegates he needs, adding, "With your help, we are going to have a much bigger delegation than we had yesterday." A bit later, on Fox News, Brett Baier asked Newt how we would deal with pressure on him to quit the race that would inevitably follow his poor showing. "There is no pressure," Newt replied. "I represent the American people."

Perhaps Gingrich is bluffing, or merely trying to raise his price for endorsing Santorum at a later date. But in pledging to campaign in Illinois today and in Louisiana later in the week, he didn't sound like a messiah about to discover reason. It was left to Rev. Al Sharpton, that noted expert on Republican politics, to get to the grist of the matter. "It really would be terrible for Mitt Romney if Newt Gingrich got out," he averred on MSNBC. As long as Gingrich stays in there, Romney stays alive."

Photograph by Eric Gay/AP Photo.