Like Pulling Teeth

I was about five when I lost my first tooth.  I still remember sitting in first grade wiggling it back and forth with my tongue.  A loose tooth is just one of those things you can’t leave alone.  You fidget and fuss, worry it back and forth seems like forever until finally that last little attachment gives way.  Be careful, don’t lose it, there’s money to be made once the tooth fairy drops by later that night.

On the other hand, my second tooth was a breeze.  Dad had this bright idea.  He tied a string around its stub, let out about three or four feet, then tied the other end to the kitchen doorknob.  Wham!  He slammed that door hard and my tooth shot across the room, ricocheted of a couple of wall, and still made me a quarter richer that night.

We might argue about which method was most efficacious, but choosing which of the two to apply in Europe relative to the Greek debt situation seems to me to be a no-brainer.  The political wrangling, pulling and tugging back and forth, possibly will not provide the needed resolution, leading instead to a parade of similar bailouts for other indebted Euro participants.  On the other hand, default and expulsion from the EU is seen as the first step toward a global economic Armageddon such as we have not seen since Russia chose that path back in the mid-1990s, and we all know how that played out.

Actually, in retrospect, such a sudden jerk on the monetary system worked out okay.  It took the Russians about six months to recover their momentum.  A year later investors globally were back to buying Ruble based debt.  Subsequently their economy grew by a factor of ten over the next decade while enjoying a stock market boom that presented them with a 20-fold increase.  Their recovery scores one point for the quick jerk.  Compare that to our own economic progress after starting a series of bail-outs three years ago.