No problem-No preparations?...Downplaying y2k?...A bump in the road?
"If y2k contingency planning is relevant and essential to the corporations and government agencies that have studied the issue, it should be relevant and essential to us all."
Victor Porilier takes a serious look at interconnectedness and dependencies.
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y2ktimebomb.com
The Complacency Peddlers
By Victor Porlier February 17, 1999
The spottiness and softness of much Y2K data has led to a wide continuum of conjectured outcomes. Leaving aside those who are simply clueless, there seem to be four general forecasts:
No problem - No preparations
Here we get the complacency peddlers who not only downplay Y2K, but often attack those advocating preparations of any sort.
Modest problems - Modest preparations
Here we have recommendations of one to two weeks of preparedness supplies and the conclusion that power outages, if any, will be local and will last no more them three days. Have a week's worth of currency in hand. This is the American Red Cross and Royal Canadian Mounted Police position.
Serious problems - Serious preparations
Here we have recommendations of one to twelve months of preparedness supplies for disruptions of up to a year or more. There is the expectation for many failures globally in power, telecommunications, banking, transportation, and business that lead to rolling brownouts, erratic shortages of goods, a fair number of business failures, and serious levels of unemployment. Something between a recession and a depression. Ed Yardeni and Ed Yourdon hold roughly this position.
Global Catastrophe - Cataclysm
This is where Y2K brings with it an overwhelming of the current world order and violent social, economic, and political upheavals. Those on the far end of this particular position include those in the New Age Cataclysmic Earth Change sects and various Christian Millennial Apocalyptics.
Reducing the continuum to these four segments is obviously over-simplified, but these groupings account for most of my e-mail, talk show, and public speaking experiences.
I am far more concerned about the proponents of complacency than those of catastrophe. Why? Because I believe that very few will act on forecasts of catastrophe and build bunkers in the wilderness. The small number choosing to do this will have minimal impact on society's functioning or finances. Besides, each of us is entitled to their own risk assessment and contingency plans, no matter how fringy it may seem to the majority.
The complacency peddlers, on the other hand, are already having a major impact. As a result, large numbers of the public believe Y2K to be a hoax, a non-starter, and, to the extent there is any substance to it, it will all be fixed in time so as to cause no extended problems. A further consequence of this view is that millions of small- and medium-sized businesses and governments in the U.S. have not addressed Y2K as a potential problem and do not intend to do so. Thus, many households, businesses and governments will not act to investigate and fix any Y2K problems they may have and will make no contingency preparations as individuals, enterprises, or communities.
For those readers of this column who hold the "No problem - No preparedness" view or know someone who does, please consider the following:
Y2K is a global concern with five interacting facets: mainframe legacy systems, desktop PCs and their applications, date sensitive microchips in embedded control processes, electronic data interchanges, and supplier-customer dependency chains. Survey after survey has shown that sizeable majorities of foreign countries, their government agencies and businesses that use computers and automation and those that depend on computerize infrastructures are not ready. Worse, many have not even started. Approximately 20 percent of the U.S. Gross Domestic Product is based on the import/export of raw materials, foodstuffs, components, and finished goods.
The global economy is increasingly shaky as it tries to shoulder a debt pyramid of $125 trillion. Asia, Russia, Eastern Europe, and Brazil are in the deflationary doldrums and are not recovering. Economics and technology are two sides of the same coin. What impacts one impacts the other. Businesses fighting to survive economically are not likely to expand their IT budgets, even if competent programmers could be found. A technological seizure means a company may not be able to provide what is needed elsewhere, nor will it be able to purchase goods produced elsewhere.
Martin Truax of Salomon Smith Barney, not known as an alarmist on Wall Street, recently commented on reports to the U.S. Senate. "What this could mean to us, according to the report, is an interruption of goods and services; the possibility of global recession affecting imports and exports; foreign investments encountering disastrous results; too many people losing confidence in the banking system; too many interruptions in the food and medical chains; and local, city, and town governments not being able to provide needed services. Our biggest risks will be the impact from foreign governments and companies and providers of key resources."
We keep hearing that more and more major systems are Y2K compliant, and I'm thankful for the good news. But, it is also true, as I read in The International Harry Shultz Letter, "Checks by some of the biggest corporations in the U.S. and Europe have revealed serious flaws in work already undertaken to tackle the millennium computer bomb. David Palmester, Year 2000 program manager for UNISYS says, 'In every instance we've come across companies thinking they were compliant, we found date-relative issues in mission critical applications.' This means supposedly fixed problems weren't fixed at all."
The complacency peddlers claim there is an ulterior monetary motivation behind the threat of Y2K. This charge presumably applies to corporate IT departments, computer consultants, and those selling seminars, books, videos, and supplies. This is akin to saying that because life insurance agents have a monetary motivation in selling a policy, there can be no substantive reality in a forecast of death even though we all know that death is inevitable. If a monetary motivation automatically means hype, hucksterism, and hoax, what are we to say about the opinions of columnists and others who presumably write for money, or talk show hosts who try to build ratings to garner advertising revenues. That hucksters abound in every field doesn't mean there is no substance in the first place.
If we are to believe that a monetary motivation leads inevitably to hype and dishonesty, then what about civil servants' reports to higher ups (recall the deceptions discovered in the Department of Defense's Y2K status reports last year). Or the reports of Y2K progress and completion in corporate America to their suppliers, customers, shareholders, and Wall Street stock value analysts or to their corporate trade associations that are responsible for their industry lobbying efforts and "impressions management" efforts in general. The monetary motivation argument should lead to critical evaluations, not outright dismissals, but this cuts across the entire society on every issue, not just to those few raising Y2K concerns.
And as for the reportedly reassuring corporate trade association reports to John Koskinen assuming no monetary motivation to distort at the industry summary level, the fact is that these are the results of partial surveys and statistical averages - unvalidated, unverified, self-reports that have passed through the hands of corporate attorneys and PR officers. Many corporations do not bother to respond at all. The definitions of compliant, ready, tested, on schedule are often vague and apply only to so-called "mission critical" systems; and not to other systems that are only designated important or supportive. Embedded systems and distributed desktop systems are often not addressed. Nor are electronic data interchanges - within and without. No one is vouching for the readiness of key suppliers and customers. Lastly, no matter how good the industry averages being reported, it is well to recall that in a lake that averages one foot in depth, there may be spots deep enough in which to drown.
If terrorists, foreign and domestic, are not likely to see this next winter as an ideal window of opportunity to damage our nation's critical infrastructure and thereby engender civil disorder, why is there so much conversation about this in the Beltway and why so many reports of military exercises, proposed and actual, in places such as San Francisco and the Corpus Christi area?
Until the complacency peddlers put to rest these interacting issues of the global economy, the uncertainties of the technological fix, and the protection of our infrastructure against terrorism, I shall continue to believe they will exacerbate whatever turbulence that may come by their "No Problems _ No Preparations" attitude. A contribution far worse, in fact, than the catastrophists urging wilderness bunkers.
For the rest of us, let us get our households, businesses, local governments, and communities on a preparedness footing so that whether the coming events are modest or serious, we will be able to respond intelligently, not in panic, because we listened to the complacency peddlers. If Y2K contingency planning is relevant and essential to the corporations and government agencies that have studied the issue, it should be relevant and essential to us all.
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