How bad will it be?

I speak several times a month on Y2K to various trade associations, businesses, and church groups. I also appear on numerous talk radio shows. In addition, I get 70 – 80 e-mails a day from people visiting my website. As a result, I interact with scores of people on a weekly basis about Y2K. Without a doubt, the No. 1 question I get is this: “So how bad do you really think it’s going to be?”

The honest answer is: I don’t know. I get up each day hoping for good news. I browse the usual Y2K websites along with the major media, reading anywhere from 25-30 articles a day. On average, the bad news seems to outweigh the good — at least the news that can be verified.

While it is true that we are making headway in getting computer systems repaired or replaced, it is also true that the days are slipping by more quickly than the progress being made. (I can’t substantiate that statement; it’s simply a subjective judgment based on the volume of material I’m reading.)

One of the things that is particularly frustrating is the quality of information available. There are at least three problems related to the reports I’m seeing.

1. The data are almost always self-reported. There is very little independent, third-party certification going on. For the most part, government agencies, infrastructure providers, and businesses are asking us to take their word for it. All of them are carefully managing the information that is released to the public. In some cases, it appears that disinformation is being purposefully distributed. Ronald Reagan’s advice at the height of the cold war seems particularly apropos: "trust but verify." Until we have someone to do the verification for us, we have to assume the worst.

2. Information about Y2K progress is sometimes overstated. Several months ago, the General Accounting Office called two federal agencies (Defense and USDA) on the carpet for reporting as compliant systems that were merely on a list to be made compliant. Assuming the best, programmers are an optimistic lot. They generally promise more than they can deliver. According to the Standish Group International, 73 percent of all corporate software development projects are late. In addition, the easier systems are sometimes targeted for repair first, thus distorting the rate of progress. If the more difficult systems are saved for last, things could slow down immeasurably.

3. Conclusions about Y2K progress are often contradictory. Two people can look at the same report and draw opposite conclusions. Everyone has their own agenda (yes, me, too), and they will necessarily filter the data through their own presuppositions. Others will purposely “spin” the information and willfully distort it for the sake of their own gain or fear of their own loss. It’s easy to pick on the people who are selling Y2K books, generators, and food, accusing them of overstating the Y2K problem for the sake of financial gain. But the truth is that some of those who are downplaying the problem — banks, federal agencies, and utility companies — are doing so for fear of financial loss. And believe me, they have a lot more at stake than any Y2K author or speaker.

The bottom line is that things are going to get even more confusing as we move toward “D day." The point of absolute certainty will never come. As much as we might like to know what will happen on Jan. 1, 2000, we simply won’t know until we get there.

So how then do we plan? Good question. At some point, you have to make some assumptions about the future and plan accordingly. This isn’t easy even under the best of circumstances. You have to accept the possibility that your planning assumptions are wrong and be willing to live with the consequences if they are. In my view, the issue is not prophecy — predicting the future with pinpoint accuracy — but personal risk management — understanding what could happen and deciding how you can protect yourself from it.

With that in mind, let me tell you what I am personally assuming about the impact of Y2K. I am still assuming at least a twelve-month disruption of basic goods and services, including periods of:

• No electrical power

• No clean water

• No telecommunications

• Shortages of food, gasoline, clothing, and all retail goods

• Wide-spread bank failures and inaccessibility of funds

• A stock market crash

  A dramatic drop in real estate values

• An economic depression

• Wide-spread unemployment
• Civil unrest, including protests, riots, and general lawlessness

• Inability of government agencies to deliver welfare, Medicare, Social
  Security, and Veterans benefits

• No meaningful leadership from the Clinton administration

• And good fishing weather (I just threw that in for grins.)

Yes, I know, it’s pretty grim. But keep in mind the fact that I am not saying any of this is going to happen. I am simply saying that each of these items are a possibility, and, therefore, I want to plan accordingly. Think of it this way: what’s the risk if I am right and you plan for this scenario vs. the risk if I am right and you don’t plan for this scenario.

To my way of thinking, there is no down side to preparedness. Sure, I may be out some money and effort if I plan and nothing much happens, but I would much prefer that to facing a scenario like I’ve described above without adequate preparation.

Whenever someone tells me they think that Y2K will be nothing more severe than a winter storm, I always respond with a comment and two questions. First, I say, “I hope you are right.” There is nothing I would enjoy more than being wrong in my assessment of Y2K. It would be a small price to pay for continuing our way of life. However, I regard preparing for Y2K like health insurance. I continue to pay the premiums, hoping I never have to make a major claim.

Second, I ask, “If we can’t get the vast majority of these systems fixed in the next three months, what makes you think we can get them fixed three days after they fail — particularly in a chaotic environment where there may be widespread disruptions?” This just doesn’t seem reasonable to me. If we don’t get most of the systems repaired or replaced in time — and at this point I personally think it’s a long shot — then I think we’re in for a much longer-term problem.

Third, I ask, “What evidence do you have that I’m wrong?” Usually, the person making the statement doesn’t have anything concrete to offer; they simply respond with some version of “Well, we put a man on the moon, so I’m sure we can fix this problem, too!” or “I’m sure with all the brilliant computer people we have, they can come up with a solution” or "My bank (or some other company) is telling me they are about finished with their work." To which I usually respond, “Let me remind you: it was these same ‘geniuses’ that didn’t have the foresight to make sure their programs would work correctly after the turn-of-the-century.” I think this kind of confidence is, quite frankly, misplaced.