While every success is certainly good news, it is an
absolute fact that nobody knows what will happen during the coming months.
The only certainty in the Y2K debate is that mass confusion and
disinformation continue to reign supreme.
Y2K, also known as the "Millennium Bug", will
cause computers and circuit boards having date sensitive embedded chips to
fail anytime between now and the year 2001, unless the bug is fixed. The
fix is simple. Merely change the two digit computer date code to four
digits so the computer will read 00 as 2000 rather than 1900. Problem is,
there are hundreds of billions of lines of code that must be reviewed and
there is no silver bullet. Add to that the hundreds of millions of
non-compliant, date sensitive embedded chips (circuit boards) that control
everything from your VCR, to electrical transmission switches, fuel pumps
on oil tankers, to—well, you get the picture. It is currently estimated
that, globally, well over a trillion dollars will be spent fixing this
problem.
After many months of hearings, the United States Senate
released its long-awaited Y2K report on February 24, 1999. In releasing
the report, the Senate’s Co-chairs, Robert Bennett (R-UT) and
Christopher Dodd (D-CT) warned, "Make no mistake, this problem
will affect us all individually and collectively in very profound ways.
... It will indeed impact individual businesses and the global economy. In
some cases, lives could even be at stake.’’ On the other hand the
Co-chairs made it clear that, "The committee has no data to
suggest that the United States will experience nationwide social or
economic collapse.’’
The Senate report concludes that our greatest
vulnerability lies offshore, especially with developing nations like
Venezuela and Saudi Arabia, from whom we get nearly half of all our oil.
They are at least a year behind in becoming Y2K compliant. Y2K won’t
suddenly cut off our oil supply, but significant disruptions and delays
can be expected. There will not be an economic meltdown, but Y2K can
create problems in America’s just-in-time economy.
In another example, Scott McNealy, the CEO of Sun
Microsystems, shocked economic leaders attending the World Economic Forum
in Davos Switzerland on January 31, 1999. He informed the audience that
companies should buy all the computers they need this year because his
company may not be able to produce them in 2000. Why? Because component
suppliers in Asia are "one to three years behind in fixing their
Year 2000 Problem." If Sun can’t produce computers, neither
will anyone else. The same is true for any product which has at least one
component made overseas.
Although Senators Bennett and Dodd call the Y2K problem
"one of the most serious and potentially devastating events this
nation has ever encountered," their overall report is optimistic.
Planes are not going to fall out of the sky (though expect reduced numbers
of flights and service), banks will operate, and senior citizens will
receive Social Security payments.
Although "95 percent of phones will work,"
Senator Bennett cautions, "there is no industry-wide effort to test
data networks, cellular and satellite communications systems or the nation’s
1,400 regional telecom carriers." Likewise, while "a
prolonged, nationwide blackout is not likely to occur, local and regional
outages remain a distinct possibility depending upon the overall
preparedness of the individual electric utility serving a given area,"
cautions the Senate report.
While not the end of civilization, such disruptions
play havoc on business, which depends on reliable power to operate.
The health care and agricultural industries, as well as
small businesses are also vulnerable to Y2K. The Senate found that "Over
90% of doctors’ offices and 50% of small- and medium-sized businesses
have yet to address the problem." This is not only important to
those seeking health care, but the health care industry in general is the
nation’s single largest industry. Its failure could be amplified many
times across the entire U.S. economy. The Senate report also reveals that
"many small- and medium-sized businesses are extremely unprepared
for Y2K disruptions. One survey shows that more than 40% of 14 million
small businesses do not plan to take any action." Failure in even
one "small business" supplier could shut down an otherwise
compliant mega corporation. This was made blatantly obvious in 1998 when
the strike at one small General Motors plant eventually shut down the
entire company.
On January 20, 1999, the Information Technology
Association of America (ITAA) issued the results of a poll of its
membership which found that 87 percent of corporate computer specialists
believed, "the year 2000 problem is a crisis for the nation and
the world. Fifty-two percent think the Millennium bug will hurt their
companies." The ITAA represents over 11,000 computer specialists
in America’s largest businesses. Although they are the ones actually
doing the work on Y2K mitigation, the press has totally ignored their
warnings.
Ed Yardeni, Chief Economist of Deutsche Bank Securities
and one of the most highly respected economists in the nation, is so
concerned about Y2K that he is forecasting a 70 percent chance of a
moderate to severe recession lasting 12 months. Yardeni challenges Clinton’s
rosy outlook on Y2K on several fronts.
While Yardeni applauds the great strides the federal
government has made in the last eight months, he questions how the
bureaucrats achieved the supposed 88 percent compliance of its mission
critical systems.
Yardeni notes that the total number of mission
critical systems "is down a whopping 25%, from 8,489 during
November 1997 to 6,399 in February 1999." If those systems
considered mission critical in late 1997 were included, the compliance
rate plummets to 56 percent! Yardeni warns, "This raises the
suspicion that federal Y2K managers might have reclassified systems to
meet the March 31, 1999 government-wide deadline. Especially troublesome
are the big dropouts in key agencies like Agriculture (-74%), Health and
Human Services (-41%), and Defense (-27%). It isn’t clear who made these
decisions and whether they were independently authorized."
If Health and Human Services is not compliant it is
unlikely welfare payments could be met. One of the biggest concerns of
Senator Bennett is rioting in the inner cities if people do not receive
their welfare checks. Deep concern also exists whether the Department of
Defense will be compliant, though the DoD is confident it will be able to
defend the United States. While these agencies are now making every effort
to fix the Y2K bug, they simply started too late.
Government bureaucrats aren’t the only ones under
suspicion. Y2K litigation costs are forecast to exceed one trillion
dollars in lawsuits against non-compliant businesses. Hence, companies are
reticent to be truthful about their Y2K readiness. The banking industry’s
image of compliance was shattered on March 22, 1999, when the London
Times dropped the bombshell that "12 large [British]
financial institutions are so far behind with their preparations to cope
with the millennium bug that they could pose a serious risk to their
customers and the markets." Like those in the United States,
these British banks had been reported as achieving compliance.
No one knows what will happen with Y2K. Experts agree
that any Y2K optimism is very premature. As Ed Yardeni observes, "Never
in human history have so many humans blindly trusted that so many other
humans won’t screw up." Y2K should be taken seriously.
It would be ironic if God used this simple problem to
show us that all the wisdom and technological accomplishments of mankind
are but foolishness to Him, "19For
it is written, I will destroy the wisdom of the wise, and will bring to
nothing the understanding of the prudent. 20Where
is the wise? where is the scribe? where is the disputer of this world?
hath not God made foolish the wisdom of this world? 21For
after that in the wisdom of God the world by wisdom knew not God, it
pleased God by the foolishness of preaching to save them that believe."
(1 Corinthians 1:19-21, KJV) Ultimately, government cannot save us.
Technology cannot save us. Our only hope is in the "foolishness"
of God—Jesus Christ. V
