Editor’s note: Starting today, best-selling author Michael S. Hyatt begins a daily Y2K commentary in WorldNetDaily. With only 100 days left before the new millennium, we thought it timely to add this insightful feature. Hyatt’s first book, “The Millennium Bug,” stayed on the New York Times’ “Business Best Sellers List” for seven months. But he considers his new book on personal survival even more important. ‘The Y2K Personal Survival Guide’; is available from our on-line store.
If you think that Y2K has been all but solved, think again. Even the officials spouting the good news don’t really believe it. Forget what they are saying. If you want to know what they believe, take a look at what they are doing.
I am constantly reminded by the Y2K naysayers that government officials, corporate spokespersons, and the traditional media are all saying that Y2K no longer poses a significant threat. According to them, organizations — at least in the United States — have the problem well under control and expect to have their mission critical systems remediated before Jan. 1. They are on track, making good progress and confident that the problem is all but solved. There may be some minor disruptions, but nothing catastrophic — certainly nothing like what I have suggested could happen if we don’t get a substantial percentage of our automated systems repaired in time.
The effect of this propaganda — and that’s precisely what it is — is apathy on the part of the general public and confusion on the part of the Y2K aware. A recent survey for the CBS news program “Sunday Morning” found that less than one-fifth of U.S. households plan to stock up on food or water in preparation for possible Y2K disruptions. Although most are doing nothing at the current time, 18 percent of respondents said they were thinking about storing some supplies later this year. The majority of those surveyed, 56 percent, said that no one in their home was even thinking about doing anything to prepare for Y2K problems.
Even those who a few short months ago were convinced that Y2K would adversely affect their lives have begun to second-guess their concerns. I’ve heard from hundreds of them. Many are wondering if their preparations were misguided. A few have even said they feel that they were misled. Some have asked if they should stop preparing, now that the threat is past. The amazing thing about this perception is that it is wholly misguided and based on nothing other than the vague assurances of government and corporate spokespersons.
Yes, there has been progress — in a few cases, dramatic progress. But, overall, the available facts do not support the conclusion that the Y2K problem is well in tow, let alone substantially solved. In fact, I would go so far as to say that those who are telling us it is, do not really believe their own public rhetoric. Why? Because their actions betray their true perceptions. Let me give you a few examples.
1. They continue to raise budgets. While companies are publicly saying that the problem is nearly solved, many are continuing to raise their budgets. Why? Because Y2K projects are turning out to be more complex and more expensive than they anticipated. The federal government initially projected spending $2.3 billion to repair its computers. Its most recent estimate (June 15, 1999) is a whopping $8.03 billion — an increase of 287 percent. The amazing thing about that is that this is $1.3 billion more than the government projected just four months ago!
Corporate Y2K budgets have followed suit. According to a recent CAP Gemini survey (May 17, 1999), 85 percent of the Fortune 500 companies said that their spending would have to rise above current estimates. To cite but one example, in its annual shareholder’s report filed in April, retail giant Wal-Mart reported that it will spend more than twice as much as it previously expected to solve Y2K-related problems. Other companies such as Aetna, AT&T, General Motors, McDonald’s, Merrill Lynch, Sears, and Xerox have experienced a similar, dramatic rise in Y2K repair costs.
If Y2K is no big deal, why aren’t the budgets going down or at least leveling off?
2. They are still pushing the deadlines out. Although virtually every corporation in the United States and Canada promised the public that they would be finished with their Y2K projects by the end of 1998, as of June 21, 1999, 92 percent of large companies have not actually completed the work and one in ten will not finish until well into next year. Worse, 33 percent admitted to being behind schedule; 35 percent are still waiting for mission-critical software to be delivered by suppliers. According to the CAP Gemini survey cited earlier, 22 percent of the Fortune 500 say they do not expect to have all their mission critical systems tested and ready for the new millennium by Jan. 1! If this is true of the largest companies — presumably the ones with the most resources to throw at the problem — what can we expect from smaller companies? Every indication is that they are running even further behind.
The federal government has now missed three Y2K deadlines imposed by the Clinton administration. The Sept. 30, 1998 deadline came and went without a single agency able to claim victory. The deadline was then extended to Dec. 31, 1998. This time two agencies — the Social Security Administration and the Small Business Administration — met the deadline. (The U.S. Customs Service and the Health Care and Financing Corporation [HCFA] also claimed compliance, but these claims were later proven to be bogus.)
The deadline was again extended, this time to March 31, 1999. On this date, the administration claimed that 92 percent of the government’s mission critical systems were Y2K-ready. However, most of this progress was made by simply reducing the scope of the project — from some 9,100 mission critical systems in September 1998 to 6,123 systems in March 1999. In addition, the simple fact is that 11 out of 24 key agencies missed the deadline again, including some of the most critical: Energy, Treasury, Health and Human Services, Defense, and Transportation. Worse, of the 43 systems identified as “high impact” (e.g., Social Security, Air Traffic Control, and Medicare) by the Office of Management and Budget, only two — Social Security and the National Weather Service — were compliant as of March 31. (The complete list can be found here.) What was the administration’s response? You guessed it — extend the deadline to Sept. 30. This, despite the fact that several agencies are not scheduled to be ready until December at the earliest.
If Y2K is no big deal, why are so many organizations having chronic difficulty meeting their deadlines? Why do they keep quietly pushing them back, and why isn’t the press calling them to task?
3. They are making contingency plans. According to another survey conducted by CAP Gemini (May 31, 1999), the vast majority of major corporations have begun to build crisis management centers from which they will control damage and coordinate the recovery of Y2K-stricken technology systems. The survey found that 85 percent of Fortune 1000 companies now plan to build Y2K command centers, up from 40 percent in November 1998. In addition, organizations across the country are canceling vacations from November through February to make sure their employees are available to address Y2K-related disruptions.
According to a report issued by the Cranfield School of Management (The Sunday Times, June 13, 1999) 60 percent of British corporations are already stockpiling raw materials and finished goods out of fear of Y2K-related supply interruptions. My guess is that a similar percentage of U.S. companies are doing the same. Even the Federal Reserve is stockpiling $50 – 70 billion in additional cash reserves.
Whatever else a contingency plan is, it is an admission that things may go wrong. But if Y2K is all but solved, if it will be no worse than your typical three-day winter snowstorm, why are so many organizations going to such lengths to prepare for failure? (By the way, would someone please explain to me why it is that when individuals and families make contingency plans it is seen as a form of panic, but when governments and corporations do so, it is seen as simple common sense?)
4. They are passing legislation to limit Y2K litigation. When I first began doing research on Y2K, the GartnerGroup, Giga Information Group, and others were estimating that litigation stemming from unresolved Y2K problems could approach $1 trillion. (Just to put that amount in perspective, that is one-seventh of the annual U.S. economic output. It is equivalent to the entire U.S. health-care industry.) According to USA Today, “Litigation resulting from Year 2000 meltdowns will be more costly than asbestos, breast implant and Superfund cleanup lawsuits combined.”
The first Y2K lawsuit was filed in August 1997. By the end of 1998, ten more lawsuits had been filed. Soon, the trickle was threatening to turn into a flood. As of March 1999, a total of 80 lawsuits had been filed along with 790 “demand letters” (the step in the litigation process that comes prior to filing a lawsuit). Almost immediately, the Senate Judiciary Committee voted 10-7 to limit lawsuits against high-tech companies stemming from Y2K malfunctions. By June, the Senate had passed the Y2K liability bill. On July 1, the House passed the same bill, and on July 20, President Clinton signed the bill into law. The new legislation is aimed at limiting frivolous lawsuits by setting a ceiling on punitive damages, narrowing the guidelines for class-action suits, and ensuring that defendants will be held liable only for the share of any damages that they cause.
But here’s the question: why are they so concerned about mounting litigation? If Y2K is all but solved, there will be few failures, right? If there are few failures, there won’t be many lawsuits, right? You would think so, but obviously the president and Congress are expecting something different — something contrary to what they are stating publicly.
5. They are even preparing for martial law. Even though I get asked about this subject wherever I go, I have studiously tried to avoid discussing it. It’s always sounded to me like something that only conspiracy theorists take seriously.
Initially, it was hard for me to admit that the government might be saying one thing and doing another. But, as I’ve watched Y2K unfold, I’ve gradually become more and more convinced that they are doing exactly that. As I testified before Congress in September 1998:
- I have detected a disturbing attitude in Washington and elsewhere as I have traveled the country. There are those who, if not saying it directly, are acting as if the people cannot be trusted with “dangerous information.” This attitude betrays a fundamental presupposition about our citizens that I do not share: that is, if people know the truth they will act irrationally and without concern for their neighbors. While this may be true in isolated incidents, it is not true of our people as a whole, as any cursory reading of our history will show.
Now the handwriting is clearly on the wall:
- The London Sunday Times reported that the British government has drawn up secret plans to use elite special forces to deal with Y2K disruptions when Jan. 1 arrives. Code-named “Operation Surety,” the plans call for members of the SAS — comparable to the U.S. military’s Army Rangers or Navy Seals — to protect not only key government sites, but also civilian installations such as banks, airports, and power stations if civil unrest becomes widespread. You can bet that if they are doing this in Great Britain, they are doing it in the other NATO nations as well.
- The Washington Post reported that a contingent of Marines based in Washington D.C. recently trained in Quantico, Va., to hone its skills in dealing with civil unrest. In the mock scenario, an angry mob of disgruntled federal workers had not received their paychecks because of Y2K computer problems and were storming government buildings. Equipped with riot shields and concertina wire, the Marines practiced various techniques for controlling the crowds.
- According to Federal Computer Week, “the Defense Department has instructed
all military commanders to maintain their units’ ability to go to war in the event of widespread Year 2000-related critical infrastructure failures, relegating local community assistance to the bottom of the department’s priority list. Local commanders at military installations across the United States and abroad will be authorized to ‘undertake immediate, unilateral, emergency response actions that involve measures to save lives, prevent human suffering or mitigate great property damage’ in the event of catastrophic infrastructure failures, according to a recent memorandum signed by Deputy Secretary of Defense John Hamre.”
These examples do not even include the myriad reports I am getting from private citizens and military personnel about urban assault training, low-flying military helicopters at all hours of the day and night (I have witnessed this myself on two separate occasions, one of them last night), the erection of convoy signs on Interstates, special Y2K operating procedures, and the re-opening of military bases that have been closed since World War II. Some of these reports may, in fact, be bogus, but I can tell you the volume has increased substantially and some of them are coming from sources I trust.
Think about this: If there aren’t going to be significant problems, why would the military be anticipating civil unrest and “critical infrastructure failures”? Why would they be engaged in such comprehensive mobilization exercises? Why would the deputy secretary of defense be instructing all military commanders to be prepared for a situation that can only be described as something akin to war?
The bottom line is this: Forget what you are hearing in the mainstream media. Forget the happy-face notices you are receiving in the mail from your suppliers and from government officials. If these spin doctors really believed that Y2K has been substantially solved, they would not be doing what they are doing. Specifically, they would not continue to raise budgets, push the deadlines out, make contingency plans, pass legislation to limit Y2K litigation, and prepare for martial law. But they are, and in doing so, they betray their true colors.
Again, forget what they are saying, and watch what they are doing. Like your Momma used to say, “actions speak louder than words.”