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Iceland Without the Ideology

But four years into its crisis, Iceland is recovering, while Europe is still kicking the can down the road. Managed devaluations will drive economies down in the near term, but the return of the drachma is not the end of the world.

Take the politics out of it and there is a way forward. When Andrew Mellon famously said "liquidate," he also meant the banks. Write down the bad loans and let the bad banks go under, but also protect the people. As a BusinessWeek history published in January shows, by 1932 Mellon wanted government to protect workers, and even supported the march of "Cox's Army" to demand intervention.

If Europe takes Iceland's way out, I wouldn't want to have any money in a big bank -- or a big bank's stock. But I wouldn't call it a victory for conservatism, and I wouldn't call it the end of the world. I'd go with a phrase from technology, the area I've covered most of my life: It's a control-alt-delete.

Reboot the system and it will run fine.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.