Why did some banks and financial institutions fail and others succeed?

There are many reasons, but one common ingredient of those that have not failed is that they are organized as partnerships and/or are controlled by a family, or are closely held by a few senior officers. That is, they have "skin in the game."

So why are not more banks and other financial companies organized as partnerships?  Primarily because the tax code requires partners individually to pay full tax on their pro-rata share of the profits as they are earned.

A properly structured tax code would encourage companies to reward their executives on the long-run profitability of the enterprise, rather than on short-run profits, which is now the case.

Members of Congress rant against the short-term mentality of many in Wall Street and elsewhere, but it is precisely the tax and regulatory systems put in place by Congress that have caused much of the problem.

Red-headed spy Anna Fermanova is no longer the hottest thing in Russia. Now it's the 500 out-of-control wildfires devouring thousands of square miles of the countryside. This conflagration makes California's annual blazes look like Boy Scout campfires. The fires have consumed entire villages and ravaged the critical wheat harvest; now they threaten a key nuclear-weapons-research facility. A huge naval logistics base burned -- along with 200 helicopters and planes.

But the reputation of Russia's new czar, Prime Minister Vladimir "Czar Vlad" Putin, may have been scorched worst of all. The disastrous forest and peat-bog infernos encircling Moscow have exposed the Potemkin-village nature of Putin's vaunted efficiency. All the czar's men can't even put out a brush fire.

The price of oil soon will soar again. The present price of a barrel of oil, $50 or so, is below the price needed to meet current demand for a sustained period of time, and it is well below the price needed to meet global demand as the world economy rebounds.

In addition, with the U.S. Federal Reserve System greatly expanding the money supply - which will continue because of the explosion in government spending - the dollar is falling against other currencies; and given that global oil is priced in dollars, the price of oil will rise in dollar terms, just as it did two years ago.

Given that many in the political class seem to think the long run is the next five minutes, they do not see or want to see this tsunami coming.  Of course, they will blame anybody but themselves.

One president gave his premature "Mission Accomplished" speech about Iraq on the deck of an aircraft carrier. Now another has given his own version as part of a Chicago-ward-politics sales pitch to disabled veterans.

The difference is that the first guy was sincere.

President Obama's pork-barrel speech to the Disabled Veterans of America yesterday (if you want to help our vets, Mr. President, shut up and do it) would have drawn a blush from those Soviet propagandists who cropped purged Politburo members from Stalin-era photographs.

Ignoring his own opposition to the liberation of Iraq, supporting our troops and the surge, Obama spoke as if all's well in Baghdad -- thanks to him.

We won that war, but we still can lose the peace. Obama shunned the fact that, almost half a year after its last national election, Iraq doesn't have a new government. Determined to abandon "Bush's war," Obama's been AWOL in Baghdad.  Does he want to lose Iraq and throw away the sacrifice of all those Americans who died to win there?

Did you notice that the major economic forecasters, both private and government, totally missed the global credit crisis and size of the recession?

The mainstream consensus economic forecasts made in December 2007 for the year 2008 for the United States, Europe and Japan predicted roughly twice as much growth as actually occurred.

You may recall that a year ago, when oil prices were racing toward $147 per barrel, the high-paid wizards at Goldman Sachs were projecting it to go over $200 per barrel - it's now below $50.

The foreign policy/political forecasts were even worse.  Just as those regarding global warming.  Why is this?

If we needed yet another example of Washington's self-absorption, we sure got it with the WikiLeaks dump of classified data on AfPak.

Government officials promptly freaked about the political consequences. The rush to insist that "there's nothing new here" and that the leaks "really don't change anything" was dishonest even by DC standards.

Lies, lies, lies, lies, lies!

The victims of this tragic event aren't punch-drunk White House staffers or members of Congress up for re-election. They're not the wed-to-Pakistan wonks at State or even the Pentagon's hide-the-bad-news generals.

The forgotten victims are our troops on the ground. And the Afghans who've risked everything to help them.

And what troubles Washington? The administration, which blithely assured voters it knew how to fix Afghanistan, is worried about eroding poll numbers. Congressional Democrats tied to the president's AfPak policies to prove their toughness on national security are panicked about voter backlash.  The troops come last to them.

The conversations at the Cosmos Club this week were very subdued.  As it has been for generations, this is where the true power elite of Washington gathers.  Whether it was in the East Garden Bar, the Old Club Room, or the Members Dining Room, the savviest veterans of Capitol Hill and K Street - Democrat and Republican - had a tone of fear and seriousness you didn't hear the week before.

Something had scared them.  Scared them like an earthquake had fractured their political foundations.  The one whispered word you could overhear more than any other was "Copenhagen."

For them, President and Mrs. Zero flying off to Copenhagen to beg the International Olympics Committee for Chicago and being rejected was not a matter of humiliation.  It was scales falling off their eyes, and in an eye-blink realizing the enormity of the mistake America made last November.

And at breakfast in the Garden Dining Room this morning (10/09), there were hardly conversations at all, just shocked silence. The consequences of giving a president afflicted with pathological egomania combined with pathological amateurishness the Nobel Peace Prize were so grave they were speechless.

Those in the Obama administration blame the Bush administration for the current mess. Yet the markets have continued to fall since President Obama was nominated (S&P down 48 percent), elected (down 28 percent) and assumed office (down 15 percent).

Worse yet, the markets are down to less than half the level they were when the Democrats took over Congress two years ago. The markets are clearly registering a vote of "no confidence" in the Democrat Congress and the Obama administration.

Markets are leading indicators, and so it is only a matter of time before the general public registers its vote of no-confidence in the Obama administration.

Rep. Barney Frank, chairman of the House Financial Services Committee, is on a witch hunt to find people in government and the private sector to threaten and blame.  This is ironic in the extreme, given that Mr. Frank was, and continues to be, a major part of the problem. 

The Islamists have it wrong: Islam isn't the world's fastest-growing religion. By birth numbers and convert tallies, it's Christianity.

And Africa's at the forefront -- a fact that's going to body-slam Moslem extremists sooner or later.

The bombings that recently butchered World Cup fans in Uganda were just the latest in a long line of crazed attacks on African Christians by Islamist fanatics. In the central states of Nigeria -- Africa's most-populous country -- religious pogroms and counter-pogroms between Moslems and Christians have become routine.

In Kenya, al Shabaab terrorists from neighboring Somalia stir up trouble and make grotesque threats. And we all know what bestial acts Sudan's Islamist government has perpetrated against black Christians over the decades.

Throughout the region, patience is wearing thin. Africa's impassioned forms of Charismatic and Pentecostal Christianity won't turn the other cheek forever. The coming backlash could be ferocious.  Here comes the next Christian Crusade.