Q&A: Super Tuesday

Your guide to the GOP contests happening across the US on Tuesday.

Q. Which states are holding GOP primaries or caucuses tomorrow, and how many delegates does each state award?
Caucuses:
Alaska, 27 delegates
Idaho, 32 delegates
North Dakota, 28 delegates

Primaries:
Georgia, 76 delegates
Massachusetts, 41 delegates
Ohio, 66 delegates
Oklahoma, 43 delegates
Tennessee, 58 delegates
Vermont, 17 delegates
Virginia, 49 delegates

Q. How many delegates are up for grabs on Super Tuesday?
437 delegates are in play.

Q. Where do the candidates stand going into tomorrow's primaries and caucuses?
Mitt Romney - 203 delegates
Rick Santorum - 92 delegates
Newt Gingrich - 33 delegates
Ron Paul - 25 delegates

Q. How many delegates are needed to secure the GOP nomination?
1,144 delegates are needed to win the party's nomination.

Q. Why does Super Tuesday matter so much?
Super Tuesday matters for different candidates depending on their position in the delegate count. The longer the GOP nomination process rolls on, the less time the eventual candidate has for the general election election, and for this reason, Mitt Romney hopes a strong showing will all but seal the deal for him

For Rick Santorum, Super Tuesday is an opportunity to catch or overtake Romney in the delegate count, or at least take a large chunk out of Romney's lead. Santorum has been surging over the past month - although he has lost momentum of late - and hopes to continue his charge tomorrow.

For Newt Gingrich and Ron Paul, sitting in distant third and fourth place, Super Tuesday, with its hundreds of delegates up for grabs, is an opportunity for both candidates to make upward moves. Candidates distant in the delegate count have historically viewed Super Tuesday as an opportunity to make up serious ground.

Q. Why do so many states (10) choose to have their primaries on the same day?
Early primary states have more sway in determining the nominee than do later ones. Candidates spend enormous amounts of time and money in Iowa - the first caucus - and New Hampshire, the first primary. States after New Hampshire and Iowa have historically had less and less impact the farther into the election process they have voted. Over the last two decades, states have been moving their primaries and caucuses earlier and earlier in order to have more impact on the nominating process.

Super Tuesday is the first real test of a candidate's popularity nationwide, and thus many states choose to hold their primary or caucus on that day, in order to play a part in the electability test.

Q. Mitt Romney and Ron Paul were on ballots on Super Tuesday 2008 (5 February). How did each fare four years ago?
Romney won 7 states (176 delegates). Of the states voting tomorrow, Romney carried Alaska, Massachusetts and North Dakota in 2008.

Paul did not win any contests four years ago.

*John McCain won 9 states (511 delegates) and Mike Huckabee won 5 states (147 delegates)

Q. Which are the key battleground states tomorrow?
Georgia, the state awarding the most delegates, is very much up for grabs. Newt Gingrich was a US House representative from that state 1979 to 1999, and could see a very strong showing there.

Ohio - seminally a battleground state in general elections, particularly in 2004 Kerry versus Bush - will be telling. With the question of general election electability being more and more tossed around, and with the GOP looking to find its best candidate for the November general election, Ohio's primary results will be crucial.

Ron Paul faces only one ballot opponent - Mitt Romney - in Virginia's primary. None of the other candidates collected the 10,000 signatures required to appear on the ballot.

Newt Gingrich could have a strong showing in Tennessee, another of the big southern states that vote tomorrow.

Idaho is one of the most conservative states in the US, and Gingrich and Santorum could both fare well there.

Q. What will the possible results tell us?
Newt Gingrich has pledged to stay in the race until the convention. His results in the more conservative states will tell us how appealing he is to the Conservative Right.

Mitt Romney is no stranger to Super Tuesday, and has to like his position this time around. Tomorrow will tell us whether Romney will be able to hold off charges from his more conservative counterparts and further separate himself from the pack.

Rick Santorum has surged into second place, and his results tomorrow will be crucial. He could emerge atop the delegate leaderboard or could fall well behind Romney. For Santorum, like Gingrich, courting the Conservative Right vote will be crucial.

Ron Paul continues to raise large amounts of cash despite having not won a primary or caucus. The future of his campaign should become clearer after tomorrow's contests.

Q. Which states follow Super Tuesday?
Over the week following Super Tuesday, Kansas, Alabama, Hawaii, Mississippi, the US Virgin Islands and Guam hold caucuses and primaries, with 165 combined delegates up for grabs.

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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