Banks and investment funds in one euro-using country gorged on the bonds of others, freed of worry about devaluation-prone currencies like the drachma, lira, peseta and escudo. But as the devaluation danger waned, another risk grew, almost unseen by investors: the chance that governments, no longer backed by national central banks, could default.

The punch will come, in other words, not because the collapse of the European banking system will cripple the European economy and thus indirectly hurt our ability to sell things to Europeans. Instead the collapse of the European banking system will directly cripple an American economy that depends on European banks to provide a fair share of our credit.

When popcorn is made (the old fashioned way), oil and corn kernels are placed in the bottom of a pan, heat is applied and the kernels pop. Were the first kernel to pop removed from the pan, there would be no noticeable difference. The other kernels would pop anyway because of the heat. The fundamental structural cause is the heat, not the fact that one kernel popped, triggering others to follow.

By CHARLES FORELLE, COSTAS PARIS and MATINA STEVIS [The Wall Street Journal] – The options being debated now [to save the eurozone] are more severe and far-reaching than those under consideration in months past. Last year, when the crisis first threatened the euro zone’s stability, leaders insisted that Greece would not default and that assistance […]

When the price of bread rose in their revolution, the French took bakers to the guillotine. They got more inflation, and less bread. When their descendants saw bond prices falling, they passed restrictions on short sales. They got lower prices, and less liquidity.

If this were just another Dangerous Dogs Act, it wouldn’t much matter. Over-reacting to a crisis is part of the stuff in trade of modern politics. But banking is a lifeblood industry for the UK, and to adopt policies that will make the sector smaller and less profitable at a time when there is no high growth alternative self-evidently coming up in the wings to save the British economy seems almost wilfully self-destructive.

The crucial difference between Mexicali (just south of the border from Calexico, California, on the Baja peninsula) and Fostoria was the wage scale: in Fostoria, unionised production workers made an average $22 an hour, including benefits, for a 40-hour week; in Mexicali, workers on the first two shifts made 15.5 pesos (about $1.83) an hour for a 48-hour week.