I hope for UPS sake that if they do go to a two tiered system that they still bring newhires to the new top pay in a reasonable time and are still generous with the benefits. Sooner or later the new guys will be the majority and since you are already unionized sounds like a major strike will be brewing down the road. Another thing to consider is if UPS is no longer the place to go to have a well paid career in exchange for hard work, are there enough people out there willing to work like this between UPS, Express, and Ground? If the economy improves pay will have to increase to be competitive. Or else they can import people willing to work for less from Mexico.
FedEx Ground warehouse workers are unionizing right now.
- Thread starter WhatCrass
- Start date
Ricochet1a
Well-Known Member
"This is why I am fairly certain that you will see a two-tiered wage structure approved in 2013."
Translation: IBT deep sixes "solidarity", and performs yet another "Run away, run away!"
This is the same tactic that is used in the airline industry to break the pilot unions up. The experienced pilots are grandfathered into a sweet deal, the newer pilots are given the shaft. Since (just like any other career progression) the new pilots are desperate for any form of work to build experience, they accept the deal (vote for the contract).
The problem is that the pilots that were grandfathered into a decent deal, have that deal defined by their hire date, NOT by their experience level - so there is no transition (once the contract is signed) from pilots receiving the raw deal to those receiving the "sweet deal". A gradual trend of an increading number of pilots with the "raw deal" are present, while those that were grandfathered gradually retire.
This has been going on for years and is a well known device to break up bargaining units. Within the airline industry, the pilots that have 6 figure incomes know they are getting a good deal, but they also know that in order to keep the junior pilots as part of the bargaining unit, they have to accept slightly less compensation AND maintain a pathway for junior pilots to acheive that sweet compensation package - or else the junior pilots will bolt and shut the operation down, thus ruining the compensation opportunities for everyone.
With the economy the way it is, this has been very difficult to do. But memories are long and when the economy improves, there won't be much sympathy for those who grandfathered themselves - take heed long time UPS drivers. The pendulum will swing back and history will repeat itself yet again. The issue is who will maintain their integrity now and who won't. When the pendulum does swing back, those that maintain their integrity will be positioned and trusted to lead - those that didn't will be dumped by the roadside.... Don't let short term greed blind you to long term stability.
Translation: IBT deep sixes "solidarity", and performs yet another "Run away, run away!"
This is the same tactic that is used in the airline industry to break the pilot unions up. The experienced pilots are grandfathered into a sweet deal, the newer pilots are given the shaft. Since (just like any other career progression) the new pilots are desperate for any form of work to build experience, they accept the deal (vote for the contract).
The problem is that the pilots that were grandfathered into a decent deal, have that deal defined by their hire date, NOT by their experience level - so there is no transition (once the contract is signed) from pilots receiving the raw deal to those receiving the "sweet deal". A gradual trend of an increading number of pilots with the "raw deal" are present, while those that were grandfathered gradually retire.
This has been going on for years and is a well known device to break up bargaining units. Within the airline industry, the pilots that have 6 figure incomes know they are getting a good deal, but they also know that in order to keep the junior pilots as part of the bargaining unit, they have to accept slightly less compensation AND maintain a pathway for junior pilots to acheive that sweet compensation package - or else the junior pilots will bolt and shut the operation down, thus ruining the compensation opportunities for everyone.
With the economy the way it is, this has been very difficult to do. But memories are long and when the economy improves, there won't be much sympathy for those who grandfathered themselves - take heed long time UPS drivers. The pendulum will swing back and history will repeat itself yet again. The issue is who will maintain their integrity now and who won't. When the pendulum does swing back, those that maintain their integrity will be positioned and trusted to lead - those that didn't will be dumped by the roadside.... Don't let short term greed blind you to long term stability.
UpstateNYUPSer(Ret)
Well-Known Member
Shouldn't economic reality be a factor in the decision process?
I mentioned in the concessions thread that all UPSers would be well advised to follow the Verizon work stoppage. Verizon hourlies are on strike as they chose not to accept the more than 100 concessions that mgt asked of them. The problem is that the landline portion of the telecom business has been on the decline for sometime and the wireless divison has been carrying the company. I will tell you that locally the strike has had little impact as most people that I mention it to are unaware of the strike. Those who are aware are not very sympathetic toward the hourlies.
UPS Ground has been for the most part flat since the economic downturn in 2009. It has been the production push that has kept ground profits where they are and the other divisions within UPS have been picking up the slack.
I mentioned in the concessions thread that all UPSers would be well advised to follow the Verizon work stoppage. Verizon hourlies are on strike as they chose not to accept the more than 100 concessions that mgt asked of them. The problem is that the landline portion of the telecom business has been on the decline for sometime and the wireless divison has been carrying the company. I will tell you that locally the strike has had little impact as most people that I mention it to are unaware of the strike. Those who are aware are not very sympathetic toward the hourlies.
UPS Ground has been for the most part flat since the economic downturn in 2009. It has been the production push that has kept ground profits where they are and the other divisions within UPS have been picking up the slack.
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Ricochet1a
Well-Known Member
Yes, but who's reality are you going to choose to use?
Economic realities are created, they are not immutable laws of physics.
Businesses create their own preferred reality. Unions force businesses to alter their preferred reality, in order to improve the standard of living for their members.
Case in point, UPS and FedEx. They both operate in the same economic system, but the employees of UPS have forced UPS to alter their preferred reality, to have a workforce available.
The reality that is currently forced upon the employees of FedEx (Express and the misclassified drivers of Ground) creates a markedly different experience for them compared to those who work for UPS - FedEx employees have that different reality forced upon them, since they have no voice in shaping that reality under which they exist. They have to operate under the "Vision of Fred", or leave - there is no negotiating.
Economic systems can and are shaped to meet the acceptable norms of conduct of society of a whole. Unions play an important role in this process - a role which is both more critical than the role played by government and more efficient to boot. Things that are taken for granted in the US by businesses are unacceptable in Europe and in many cases outright illegal. The allocation of resources and income in Europe is much more equitable than it is in the US... This is because the chosen realities they operate under are markedly different. Look at how FedEx broke the work stoppage at CDG. FedEx couldn't outright import labor to break the stoppage (violated French labor law and norms), they had to move the replacement labor to Cologne Germany, THEN re-route the network to use Cologne as a hub as opposed to Paris.
Businesses don't have to employ illegal labor in the US in order to get work accomplished, they do so because it is more cost effective and they can get away with it. I work my tail off because I couldn't get away with holding up banks for very long. I'm forced to operate under societial norms and laws in order to enjoy the life I do. If I could make a living by holding up banks - and not have anyone stop me - I'd seriously look into it.
If it were to become socially unacceptable for businesses to employ illegal labor in this way (or for legislation to be passed which would make this practice prohibitively expensive to even contemplate), then it would stop, a new "reality" would be created and the work would be performed by US citizens at a wage rate that US citizens would accept. If enough companies were be FORCED to operate in a more socially acceptable manner, then the equilibrium wage rate would rise to the point where product/service pricing would balance with the cost of imported products. Since the US economy is predominently a service economy, wages have the potential to rise considerably. Low wages exist because business can get away with it and they value their shareholders more than they do the labor. Unions help to redress this imbalance.
As I said, UPS cannot continue to compensate its wage employees at current levels as long as the conditions within FedEx Ground are socially tolerated or tacitily sanctioned by the US legal system. The IBT has managed to get premium compensation for the UPS drivers established. But this won't continue for long if the imbalance that exists between UPS and FedEx labor continues. UPS has proven that middle class jobs can be maintained within a package delivery network. But if FedEx is going to get away with violating societial norms of conduct while the US legal system does nothing, then hard economics will dictate that UPS reduce its compensation levels in order to stay in business.
The upcoming PRIMARY battle the IBT (and its members) have ISN'T with UPS management - it is with the FedEx business model. For as long as that business model is allowed to exist unaltered, any ground the IBT manages to hold now with UPS, will be lost in the coming years due to the economic reality imposed by the existance of Ground.
Since the IBT did a run away act last week wih Ground, I'm not confident the IBT will be of any use to labor in the coming years. A "play it safe" mentality will only delay the inevitable.
R1a, again good analysis but Europe demonstrates that too much of a good thing is also unworkable. Their system is falling apart because, while good intentioned, they've given too much in the form of entitlements to workers. We have the other extreme here, with owners taking the lion's share. Equlibrium has to be reached where people are rewarded for productivity as opposed to be taken advantage of. And they must be productive, as opposed to the citizens of many European countries expecting a comfortable life for minimal effort.
Ricochet1a
Well-Known Member
Don't confuse Greece with Germany or Belgium. Germany works just fine, Greece is a trainwreck.
Greece tried to use socialism, political patronage and deficit spending to live the lifestyle of northern Europe, with the culture and economy of a southern European nation. Like all attempts at socialism and deficit spending, the money and credit ran out, and the creditors came a knockin'.
The standard of living of a nation is directly related to the development of the economy within that nation. You can have workers in each Greece and Germany performing EXACTLY the same task - but the sustainable compensation level of the German worker will be higher. The economy is more developed, so compensation levels can be made more equitable between the "apex" of the income pyramid and the base of the income pyramid.
This is why the US economy (on a macro level) will always be able to compete on a worldwide basis (very developed economic base), but an INDIVIDUAL American worker can't DIRECTLY compete against a Central American wage rate. This is why free trade in goods can be performed (with some restrictions), but unrestricted movement of labor between developed and undeveloped economies cannot be done - without creating havoc for labor within the developed economy. The situation with FedEx Ground is analogous to having labor from an undeveloped economy participating in the economy of a developed economy - labor havoc ensues.
The problem with your assumption, is that you have the incorrect frame of reference. Whenever GOVERNMENTS GIVE anything to citizenry (unearned entitlements), they system will eventually collapse. Whenever labor negotiates with their employer equitable compensation levels, by DEFINITION, the exchange is sustainable. Both parties negotiate from a position of equality, and in the end, have a mutually agreeable arrangement. When governments hand out entitlements, there is no economically sustainable condition. Patronage is used to determine the allocation of resources, not economic realities. Governments should NEVER be in a postiion where they are handing out resources to individuals - they exist to serve the COMMON GOOD.
Individuals ensure their economic well being by being allowed (through their governments establishing ground rules) to engage in collective bargaining with their employers and arriving at mutually agreeable terms of compensation.
The role of governement is to set the ground rules for economic activity to take place under, not to constantly place their "thumb" on one side or the other of the economic scale to achieve a predetermined outcome. An analogy would be to have professional sports played with the rulebook (the ground rules), but then have the game officials add points to one side or another based upon their subjective evaluation (one side needs additional help to win, one side is playing facing into the wind).
This is why governments should NEVER engage in the determination of who is going to receive a handout, and who isn't. The government is placed into a role of determining favorites. In the example of Greece, the politicians were forced into an upward spiral of handing out more and more, to get elected and prevent unrest. The system had to eventually come crashing down. Whenever governments get into the game of determining favorites and giving handouts, the system eventually comes to a abrupt end. Governments find themselves unable to take enough from those who do have something, and can't give enough to those who have less - to keep them happy. More in the wagon than pulling the wagon...
The solution is collective bargaining. Neither side gets everything it wants, but in the end, each side is able to get enough to make the deal worth doing. If agreement can't be reached, then a deal isn't struck and the sides walk away (lockout or strike). It does resemble a game of Poker more than a game of Chess, but in the end, if each side is going to get what they want, they have to work together. When government gets involved in determining winners and losers, it creates more problems than it solves.
Empower the individual, restrict the government, respect property rights, and prosperity should ensue...
Greece tried to use socialism, political patronage and deficit spending to live the lifestyle of northern Europe, with the culture and economy of a southern European nation. Like all attempts at socialism and deficit spending, the money and credit ran out, and the creditors came a knockin'.
The standard of living of a nation is directly related to the development of the economy within that nation. You can have workers in each Greece and Germany performing EXACTLY the same task - but the sustainable compensation level of the German worker will be higher. The economy is more developed, so compensation levels can be made more equitable between the "apex" of the income pyramid and the base of the income pyramid.
This is why the US economy (on a macro level) will always be able to compete on a worldwide basis (very developed economic base), but an INDIVIDUAL American worker can't DIRECTLY compete against a Central American wage rate. This is why free trade in goods can be performed (with some restrictions), but unrestricted movement of labor between developed and undeveloped economies cannot be done - without creating havoc for labor within the developed economy. The situation with FedEx Ground is analogous to having labor from an undeveloped economy participating in the economy of a developed economy - labor havoc ensues.
The problem with your assumption, is that you have the incorrect frame of reference. Whenever GOVERNMENTS GIVE anything to citizenry (unearned entitlements), they system will eventually collapse. Whenever labor negotiates with their employer equitable compensation levels, by DEFINITION, the exchange is sustainable. Both parties negotiate from a position of equality, and in the end, have a mutually agreeable arrangement. When governments hand out entitlements, there is no economically sustainable condition. Patronage is used to determine the allocation of resources, not economic realities. Governments should NEVER be in a postiion where they are handing out resources to individuals - they exist to serve the COMMON GOOD.
Individuals ensure their economic well being by being allowed (through their governments establishing ground rules) to engage in collective bargaining with their employers and arriving at mutually agreeable terms of compensation.
The role of governement is to set the ground rules for economic activity to take place under, not to constantly place their "thumb" on one side or the other of the economic scale to achieve a predetermined outcome. An analogy would be to have professional sports played with the rulebook (the ground rules), but then have the game officials add points to one side or another based upon their subjective evaluation (one side needs additional help to win, one side is playing facing into the wind).
This is why governments should NEVER engage in the determination of who is going to receive a handout, and who isn't. The government is placed into a role of determining favorites. In the example of Greece, the politicians were forced into an upward spiral of handing out more and more, to get elected and prevent unrest. The system had to eventually come crashing down. Whenever governments get into the game of determining favorites and giving handouts, the system eventually comes to a abrupt end. Governments find themselves unable to take enough from those who do have something, and can't give enough to those who have less - to keep them happy. More in the wagon than pulling the wagon...
The solution is collective bargaining. Neither side gets everything it wants, but in the end, each side is able to get enough to make the deal worth doing. If agreement can't be reached, then a deal isn't struck and the sides walk away (lockout or strike). It does resemble a game of Poker more than a game of Chess, but in the end, if each side is going to get what they want, they have to work together. When government gets involved in determining winners and losers, it creates more problems than it solves.
Empower the individual, restrict the government, respect property rights, and prosperity should ensue...
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You need to update your research. Germany was the economic engine that was pushing Europe along but recently the German stock market lost 19%. Why? Things have developed way past Greece, Portugal, and Ireland. Italy is now in trouble and France isn't far behind. Those hard working Germans and Scandinavians are getting very frustrated with southern Europe. The Euro is in danger of collapse and with it will go the Union most likely. Too much gov't control has stunted too many European economies. And if Europe collapses the economic fallout will affect us for years. As many problems we're experiencing Europe has it worse. Upstate mentioned economic reality. The reality is that FedEx is heavily invested in Europe. A collapse there will greatly affect the bottom line and as POed as we all are we won't have much choice but to just take it. At some point it'll all shake out but it'll be too late for us unless one is thinking 10+ years out.
Ricochet1a
Well-Known Member
Trying to gauge the strength of a nation's economic policy by looking at a snap shot of a particular commercial market index within that nation is about as spurious of an argument as can be made.
I'm assuming you are looking at the DAX and how it is sitting just below 6000 right now, down from a 52 week high of about 7600.
STOCK markets go up and down based upon profitability prospects of the stocks listed within that market. There is tremendous VOLATILITY within STOCK markets - recently due in large part to the US debt ceiling debacle and the downgrade of the UNITED STATES credit rating (sovereign debt rating).
Germany is, and for the next 25+years at least will be the economic powerhouse of Europe.
Long term economic and monetary policy is what is being discussed, not a snap shot of a particular stock market performance. My portfolio took a beating in the past week - does that mean the US is headed into the dumper - don't think so.
Europe isn't in danger of collapsing, the SOVEREIGN debt of southern European nations has threatened those governments' abilities to continue on their course of deficit spending - not the health of the companies operating within. The problem isn't economic output, it is governments that can't balance their books and the population which wants handouts. The US government is facing the same issue - there is a tremendous gap between revenues and expendatures, which can't continue.
The greater issue within Europe is that they have a single currency, yet each nation maintains a separate economic policy. With a single fiat currency, this won't work. This is why either the southern European nations will either have to leave the Euro and go back to a national currency, or the economic policies of each EU nation will have to be approved by the EU central banking system (not likely).
Before the Euro, each nation could crank up the printing presses, devalue their currency and solve their domestic deficit problem that way. They can't do that now - the individual nations of the EU can't crank out Euros independently. Due to this phenomenon, the Euro has asumed the characteristics of a commodity (much like physical gold) rather than a fiat currency (Greece can't create Euros out of thin air). This is what is creating all the problems. In the past, the peseta, lira and drachma could be devalued, and the problem would disappear. It would drop the value of the holding of each of those currencies, being a de facto confiscation of wealth or instant flat tax - depending on point of view. That is why those currencies were NEVER held - they were converted into stable currencies (US Dollars, Japanese Yen, German Mark) if the "wealth" were to be kept liquid for a period of time. Now those countries are dealing with a currency which they have no control over, so they have to end their previous behavior and start balancing their books. The Euro has only been the sole currency in most European nations for just about 10 years and it is already causing massive problems. Either Europe will adopt integrated national economic policies (won't happen) or the Euro will become a transnational currency with each EU member nation reverting back to a national currency for regular domestic transactions.
This is part of the original goal of introducing the Euro - FORCING a common economic policy on the member nations. It was also the reason why many nations resisted accepting the Euro - and the UK to this day still has a sovereign currency (GBP). I can't imagine the Brits ever giving up the Pound now, nor should they.
Try this...
Compare the yields on 10 year sovereign debt for all European bonds. The lower the yield, the greater the confidence in that government's ability to meet its debt obligations without difficulty. Compare the yield of the Greek 10 year note and the German 10 year note. Let us know what you find out...
I'm assuming you are looking at the DAX and how it is sitting just below 6000 right now, down from a 52 week high of about 7600.
STOCK markets go up and down based upon profitability prospects of the stocks listed within that market. There is tremendous VOLATILITY within STOCK markets - recently due in large part to the US debt ceiling debacle and the downgrade of the UNITED STATES credit rating (sovereign debt rating).
Germany is, and for the next 25+years at least will be the economic powerhouse of Europe.
Long term economic and monetary policy is what is being discussed, not a snap shot of a particular stock market performance. My portfolio took a beating in the past week - does that mean the US is headed into the dumper - don't think so.
Europe isn't in danger of collapsing, the SOVEREIGN debt of southern European nations has threatened those governments' abilities to continue on their course of deficit spending - not the health of the companies operating within. The problem isn't economic output, it is governments that can't balance their books and the population which wants handouts. The US government is facing the same issue - there is a tremendous gap between revenues and expendatures, which can't continue.
The greater issue within Europe is that they have a single currency, yet each nation maintains a separate economic policy. With a single fiat currency, this won't work. This is why either the southern European nations will either have to leave the Euro and go back to a national currency, or the economic policies of each EU nation will have to be approved by the EU central banking system (not likely).
Before the Euro, each nation could crank up the printing presses, devalue their currency and solve their domestic deficit problem that way. They can't do that now - the individual nations of the EU can't crank out Euros independently. Due to this phenomenon, the Euro has asumed the characteristics of a commodity (much like physical gold) rather than a fiat currency (Greece can't create Euros out of thin air). This is what is creating all the problems. In the past, the peseta, lira and drachma could be devalued, and the problem would disappear. It would drop the value of the holding of each of those currencies, being a de facto confiscation of wealth or instant flat tax - depending on point of view. That is why those currencies were NEVER held - they were converted into stable currencies (US Dollars, Japanese Yen, German Mark) if the "wealth" were to be kept liquid for a period of time. Now those countries are dealing with a currency which they have no control over, so they have to end their previous behavior and start balancing their books. The Euro has only been the sole currency in most European nations for just about 10 years and it is already causing massive problems. Either Europe will adopt integrated national economic policies (won't happen) or the Euro will become a transnational currency with each EU member nation reverting back to a national currency for regular domestic transactions.
This is part of the original goal of introducing the Euro - FORCING a common economic policy on the member nations. It was also the reason why many nations resisted accepting the Euro - and the UK to this day still has a sovereign currency (GBP). I can't imagine the Brits ever giving up the Pound now, nor should they.
Try this...
Compare the yields on 10 year sovereign debt for all European bonds. The lower the yield, the greater the confidence in that government's ability to meet its debt obligations without difficulty. Compare the yield of the Greek 10 year note and the German 10 year note. Let us know what you find out...
CharleyHustle
Well-Known Member
Sounds like a Republican or Tea Party platform. Not sure how this equates to more rights to collective bargaining. You make excellent points and have well reasoned and compelling arguments. In the end however, you always come back to the same old, same old, "we're poor little abused FedEx employees and someone else has to do our dirty work". There isn't a labor union in the world that can make or force you to organize. Until the employees at FedEx reach that tipping point, they will continue to get what they get. No doubt UPS has a tough road to hoe in future years, but if all of FedEx unionized tomorrow, then next week a new non-union delivery company would enter the fray. One thing you can't do is ever underestimate the competition. Can UPSers earn their pay and produce to the level of their compensation and if so, can FedExers keep pace knowing that comparativly they make diddly squat.
You seem to be looking at the problem as being U.S. centered but this time it's Europe centered. Certainly Germany is strong but they are yoked to the rest and many of those countries are putting a huge drag on the Euro. The Euro is in danger of collapse and if so you'll see the return of the Mark, the Lira, etc. Socialism is fantastic on paper, ultimately fails in practice. Capitalism can be brutally exploitive, but it does work. Maybe someday some kind of hybrid system will be developed that takes care of peoples' needs while insuring stable economies. We aren't there yet and Europe is demonstrating it right now.
If you have a two tiered pay system with the lower tier paying $22hr as I've heard then those guys will be making less than many of our couriers. We have 7 payscales and the topped out couriers on the lowest make almost $22hr. Of course it takes longer to get there for us but the biggest advantage UPS will have is benefits. How long will that last before they say they can't afford the healthcare or great pension? I don't buy the idea that a new, non union company will jump in if we unionized. You are talking a huge, huge investment and needing enough employees to boot. DHL couldn't pull it off. And even if Express unionized Ground wouldn't. The start of another company at this point could only happen if one of the existing companies went under and even then it would take time, not a quick jump in.
Ricochet1a
Well-Known Member
You seem to be missing the point... If you want to keep the gravy train moving, you have a VITAL interest in getting FedEx employees unionized and the drivers of Ground correctly classified as employees so that they can unionize. UPSers do "earn" their pay, but the only reason they get paid what they do now, is because of what unionization has done. If you want to continue to get that pay, you'd better get those Ground drivers reclassified and the Express Couriers able to unionize within a few years.
Don't think you have a red letter "S" on your chest and can defeat all comers. With a Ground driver being compensated for between one-third and one-quarter of what you're being compensated, the condition won't last for long. You have to compete on the basis of the cost to move a single package - hate to break the news, but right now, you're losing big time. The reason you're losing is due to one thing and one thing only - the Ground drivers are misclassified. Creates a real bugger of a problem for YOU.
So see, it is your problem in a BIG way. Since it is your problem, it is an even bigger problem for the union that represents you. They have been running away of late, and don't seem to understand the situation. It seems only their membership can help them understand the problem.
So, if you are able to adapt to a 1300+ sq ft truck and get it delivered in the same time as your 900, then you can compete directly with Ground. But I don't think that will happen. The alternative is for UPS to lower your compensation so that you can compete with Ground on a cost basis. The next alternative is for the membership of the IBT to act in their OWN self interest, and make sure the Ground drivers get properly classified. Its your choice... unless you really do want to be fitted with a red letter S.
Ricochet1a
Well-Known Member
This (with other posts in this string) are getting off the topic of the string, but since the diversion is already made... For the record, Soros isn't my favorite guy, but he is intelligent...
Soros suggests Greece, Portugal quit euro-zone
Some quotes from the above...
"One has so mishandled the Greek problem that the best way forward at present might be an orderly exit" with Greece leaving both the EU and the euro common currency, he said in an interview published Sunday by the German magazine Spiegel.
"Whether you like it or not, the euro exists. And for it to function properly, countries sharing the currency must be able to refinance a large part of their debt under the same conditions
...Berlin is opposed to the introduction of such bonds, but Soros suggested Germany, as Europe's strongest financial partner, should be responsible for defining the rules for its introduction....
.....
The only solution is for Greece to leave the Euro zone, they can't continue borrowing at higher and higher rates. The German taxpayer is finished bailing out the Greeks, so that is coming to an end. Since each country's economic policy is still determined individually by each country, there can be no such thing as a "Eurobond".
Institutions don't offer the same terms of credit to an individual with a score of 615 as they do to individuals with a score of 815 - just because they happen to live next to each other. To create a situation like Soros is hinting at (but knows will never happen) is to in essence make the individual with the credit score of 815 ultimately responsible for the debts of the individual with a credit score of 615 - the German taxpayer isn't going to accept that.
So, Soros making the points he did was merely an exercise in stating the obvious, and trying to push the issue of getting the Greeks and possibly the Portugese out of the Eurozone, so that the rest of Europe can get on with its business and let those nations who aren't able to act responsibily to sort out their problems on their own.
Soros suggests Greece, Portugal quit euro-zone
Some quotes from the above...
"One has so mishandled the Greek problem that the best way forward at present might be an orderly exit" with Greece leaving both the EU and the euro common currency, he said in an interview published Sunday by the German magazine Spiegel.
"Whether you like it or not, the euro exists. And for it to function properly, countries sharing the currency must be able to refinance a large part of their debt under the same conditions
...Berlin is opposed to the introduction of such bonds, but Soros suggested Germany, as Europe's strongest financial partner, should be responsible for defining the rules for its introduction....
.....
The only solution is for Greece to leave the Euro zone, they can't continue borrowing at higher and higher rates. The German taxpayer is finished bailing out the Greeks, so that is coming to an end. Since each country's economic policy is still determined individually by each country, there can be no such thing as a "Eurobond".
Institutions don't offer the same terms of credit to an individual with a score of 615 as they do to individuals with a score of 815 - just because they happen to live next to each other. To create a situation like Soros is hinting at (but knows will never happen) is to in essence make the individual with the credit score of 815 ultimately responsible for the debts of the individual with a credit score of 615 - the German taxpayer isn't going to accept that.
So, Soros making the points he did was merely an exercise in stating the obvious, and trying to push the issue of getting the Greeks and possibly the Portugese out of the Eurozone, so that the rest of Europe can get on with its business and let those nations who aren't able to act responsibily to sort out their problems on their own.
More likely the Greeks and Portugese will be forced out. But then do you force out the Italians? The Spanish, Irish, and French? Will the British continue to experience civil unrest? Will that spread to other countries? Certainly could to France. Will forced out countries retaliate with punitive trade policies? And I've always wondered if Soros is truly a liberal. He made his billions betting against currencies. The surest way to bet against the Dollar is to back extremist candidates who would at least attempt to implement policies that would weaken the Dollar. I bet he made big money on the Dollar's slide. Ironicly the Dollar has strengthened in the last week due to flight to safety. It's still the world's reserve currency and when other major currencies are troubled the Dollar always strengthens.
