No Y2 chaos

Challenge to the doomsayers: Where's the evidence?

Issue: "More clay than Potter," Oct. 30, 1999

The final countdown on the big Y2K clock has begun, and it's tempting to say that it's anybody's guess just how bad it's going to be.

But it's not just anybody's guess. Things aren't going as badly as the doubters hoped they would. With just over 60 days to go, a few of the scaremongers, including some who have advertised here in the pages of WORLD, are raising their voices, as if to make up in volume what they have already lost in accuracy. But the evidence grows every day that the major dislocations some have predicted for the global economy and for society in general are very unlikely to happen.

For one thing, we've already passed a handful of dates that were once forecast to be precursors of the really bad date, Jan. 1, 2000. Thursday, Sept. 9, for example, was predicted by some to be a mini-disaster because it would show up as 9/9/99 in so many high-tech devices-which, the prophets of doom said with near certainty, could interpret a string of nines only as an instruction to shut the computer completely down. But, of course, you have read of no computers shutting themselves down on Sept. 9.

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Others predicted that Oct. 1 might be a bad day, as the federal government entered its new fiscal year-the year dated 2000. To be sure, the feds weren't ready with an official budget when we turned the calendar from September to October. But neither have you heard any news reports about federal employees not getting their paychecks just because Uncle Sam's now operating in a fiscal year denoted with two zeroes. No, the federal treasury continues to spend our money very handily, much as many of us might have hoped for a shutdown of some sort.

Oddly, one of the biggest arguments used by the Y2K worriers should in fact be seen as a reason for confidence. The skeptics regularly point to the huge dollars spent by both the government and thousands of corporations to get ready for midnight on Dec. 31, 1999. And what they say is true. By some estimates, those expenditures can no longer be measured simply in the hundreds of millions of dollars. Billions of dollars have now been invested in Y2K equipment and software in anticipation of the big deadline.

But that should reduce your worries, not enlarge them. On many fronts, prudent managers have said: "We can't afford to take big risks of business interruption. So let's make sure our equipment is modern and ready to make the big century switchover."

The less-told story, however, is that such figures are in fact vastly inflated. Yes, the dollars have actually been spent. But yes, those dollars would also have been spent even without the Y2K scare. It might be that the spending would have been spread out over the next two, three, or four years-but antiquated equipment almost always gets replaced. In this case, the Y2K phenomenon simply gave businesses and government an excuse to buy early what they would have invested in fairly soon anyway. The folks to worry about are the equipment manufacturers and salespeople who have to face the first 12-24 months after Jan. 1, 2000, listening to their customers say: "Sorry, I spent my budget for the next couple of years just getting ready for Y2K!"

The strongest signal of all, however, that not much is going to come from Y2K is the continuing relative stability of the securities markets. I say "relative stability" because the market obviously has its ups and downs, including some dramatic bouncing in the last few weeks. Yet clearly, the jumps you've seen in recent days have demonstrably not been related to Y2K but tied instead to the comments of Alan Greenspan, to unemployment figures, to interest rates, and to other specifically identifiable factors. But even with a 250-point tumble in the Dow, you simply don't hear anyone attributing problems to Y2K.

To be sure, the public can be wrong. God's great judgment day is surely coming, and the human race as a whole seems terribly capable of ignoring that sober fact. So a stable stock market is no guarantee. But if Y2K were considered by even a significant minority of observant people to be a realistic threat to the regular order of things, I think you'd see evidence of that in investment patterns-particularly now with only two months to go before the big technological D-Day. What you've heard instead is a telling silence on that issue.

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