US Senate Y2K Committee underwhelmed by preparations
Does the buck stop on 1/1/00?
Widespread Y2K catastrophes are unlikely, but the number of non-fatal inconveniences and service interruptions caused by computer stuff-ups will be far more numerous than anticipated, according to a report released today by Senate Y2K Committee Chairman Robert Bennett (R--Utah). The chief problem is widespread readiness self-reporting, which the Committee likens to "letting students grade their own tests." Certainly a fair number of the rosy reports we've been getting don't bear a close examination. The Committee notes, for example, that while the power industry cheerfully reports itself to be 99 per cent ready, only 60 per cent of electric utilities have submitted themselves to outside review, only 25 per cent have actually tested their fixes, and only 24 per cent have disclosed the actual details of their preparations. And this from an industry the Committee regards as among the best prepared. Among the worst prepared are health care, especially the 911 emergency phone network, small businesses and educational institutions. Numerous 911 "answering points" remain unprepared for the rollover; a mere 37 per cent of schools and universities were compliant at last tally; and "nearly half of small- and medium-sized businesses are taking a wait-and-see approach to Y2K," the Committee finds. The Committee confirmed Federal Reserve Chairman Alan Greenspan's optimistic assessment of the US financial sector, as The Register reported yesterday. The Fed has made extra currency available, based on an estimate that all Americans will withdraw an average of US$500 in cash just before the rollover. The credit market looks healthy, and so far producers show no signs of rushing to stockpile inventories. The news gets worse on the overseas front, with several of America's largest trading partners, China, Russia and Italy, racking up some of the lowest scores on the Y2K report card. The overall state of preparation in Eastern Europe, Africa, Asia and South America is alarmingly poor. Furthermore, oil-producing nations, some of which are barely developed, will be especially vulnerable. "Severe disruptions to crucial supply chains are likely to occur," and may well slow the wheels of international commerce for an extended time. We note that stock, bond and currency profiteers in the most developed countries like to panic in the face of minor threats, and can often turn financial glitches among vulnerable countries into major economic catastrophes once the herd gets spooked and stampedes hysterically towards the nearest point of exit. Courage, patience and steady nerves will be the best vaccine against a global Y2K financial meltdown; but, as the behaviour of investors in Asian markets illustrated in 1997-98, such attributes are rare among their kind. ®