Public panic is the riskgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Public Panic Seen A Top Y2K Risk -U.S. Experts
By Marjorie Olster
NEW YORK (Reuters) - Two of Washington's top trouble-shooters for the year 2000 computer bug said Wednesday they are now more concerned about the risk of a public panic than a collapse of the national infrastructure.
John Koskinen, chair of the President Clinton's Council on Year 2000 Conversion, and Federal Reserve Board Governor Edward Kelley said they were confident the country's power, transportation, communications and health care systems were not in danger.
Both experts said one of their top priorities is averting a ''public overreaction'' that could prompt a massive run on banks, gas stations and mutual funds ahead of the turn of the century.
``Actions that individually look logical like filling up your gas tank on December 31, taking $1000 out of the bank, buying twice as many prescription drugs as you usually do, taking 20-30 percent of your IRA money out of the market -- a couple hundred million Americans all do that at one time you've got yourself a major problem,'' Koskinen said.
The chief ``real risks'', in their assessment, are that foreign countries, local U.S. authorities and small businesses here are ill prepared for computer failures, they told a panel discussion on the press and Y2K sponsored by the Media Studies Center in New York.
``Our risk for the country is less likely to be a national infrastructure failure and it's more likely to be a failure either of will or information or reporting,'' Koskinen said.
The so-called Y2K problem arises because many older computers were programmed to recognize only the final two digits of a year.
That has fanned concern that computer-controlled power, communications, transportation and financial systems, among others, may fail or malfunction in 2000 if they do not recognize ``00'' as a new year.
Kelley said the Fed did not foresee any reason for a surge in demand in cash around year-end but plans to have $50 billion of cash ready to meet any consumer withdrawals spurred by fear of bank computer failures.
``Probably the most important single element that is going to tell the tale here in our being able to successfully navigate through this Y2K millennium bug challenge is going to be how the public reacts to it,'' the Fed policymaker said.
The public could become ``so overly worried about what might happen that there could be created the very type of problem we are working so hard to prevent,'' he cautioned.
Koskinen said he does not foresee a widespread collapse of the country's power grids, financial system, telecommunications or transportation systems.
``It's important to understand that planes aren't going to fall from the sky. The elevators aren't going to the basement and the pacemakers aren't going to stop,'' he said.
He said he was confident the government's computers would also not pose major problems. But he was less sanguine about local authorities and small businesses who have, in some cases, devoted far fewer resources to testing and contingency plans.
``There is a huge problem in healthcare because there are a large number of institutions and organizations which are free standing, 100-bed local community hospitals that are hard to get information on,'' he said.
In Koskinen's view, the banking industry is the most well-prepared.
Kelley said he was confident banks will be prepared and there is little likelihood the financial system will seize up or crash.
``We can handle any (liquidity) need that might emerge and still not have it affect monetary policy,'' he said.
Liquidity concerns related to Y2K problems would not stop the Fed from raising interest rates later this year, if needed to head off inflation, Kelley said in an interview with Reuters Television ahead of the panel discussion.
Though some foreign countries have been slow to address the issue, the Fed does not expect this to seriously affect worldwide financial activity which he said is dominated by a relatively small number of institutions, many of which are based in the U.S. and well prepared.
-- Flanagan (firstname.lastname@example.org), March 11, 1999
Two fairly recent articles for thinking about the panic argument:
Will Y2K Discussions Cause Panic? by Ed Yourdon (Nov 11, 1998)
Y2K Panic Is The Biggest Threat? Dont Be Ridiculous! by Michael Hyatt (Dec 22, 1998)
-- Arnie Rimmer (email@example.com), March 11, 1999.
The comments from the article you posted are from a conference yesterday about the press and panic. If you have the free RealPlayer software, I urge you to listen to the conference at this link:
Everyone was civil, but I don't believe the media's concerns about Y2K are the same as Koskinen's and Kelley's. You be the judge.
-- Kevin (firstname.lastname@example.org), March 11, 1999.
Koskinen and Kelley are "two of Washington's top trouble-shooters for the year 2000 computer bug"? In what way? They have absolutely no oversight authority for any remediation work, that I know of. They have no resources to add to any efforts. They have no subject matter expertise. They're not leaders in any way; they're just a couple of high-level government "suits" waving pom-poms and trying to keep a lid on this mess. This Reuters staffer has no clue.
On the other hand, Greenspan used to crank code, as did Yardeni. Neither of them sound real confident...
-- Mac (email@example.com), March 11, 1999.
Koskinen and Kelley are "two of Washington's top trouble-shooters for the year 2000 computer bug"? In what way? They have absolutely no oversight authority for any remediation work, that I know of. They have no resources to add to any efforts. They have no subject matter expertise. They're not leaders in any way; they're just a couple of high-level government "suits" waving pom-poms and trying to keep a lid on this mess. This Reuters staffer has no clue. On the other hand, Greenspan used to crank code, as did Yardeni. Neither of them sound real confident... "
Astonishing arrogance! As if the only folks who have any insight into Y2K are those that "crank code". Programmers are like mechanics, you might want them to fix your car, but would you hire them to examine the future of trasportation? Hardly.
-- Vinnie (firstname.lastname@example.org), March 11, 1999.
Arrogance? Mechanics? K is a LAWYER fer cryin out loud! Even if he could tell the truth what relevance would it be? He has shown zero insight into the systemic nature of the problem.
What they are doing is setting the victims up as the bad guys. The banks failed and the stores are empty because 10% of all Americans panicKed at the last minute. And the reason they panicKed was BECAUSE they were lied to early on and then figured out the scam late!!
-- RD. ->H (email@example.com), March 11, 1999.
From MSNBC ...
Y2K fears grow as govt struggles to become compliant
New York, March 11 - All the hype about the so-called Y2K bug has some blaming the media for creating a panic about what might happen at 12:00 a.m. on Jan. 1, 2000. Still, the experts say that while panic isnt appropriate, healthy concern is. This is especially the case because a call for government agencies to become Y2K compliant has fallen behind, and more pressure is being placed on local communities to pick up the slack. ... More ...
Love the comment ... The federal government also is accused of playing a Y2K information shell game.
-- Diane J. Squire (firstname.lastname@example.org), March 11, 1999.