Wednesday November 17 11:54 AM ET

Commerce's Daley Says Y2K Won't Derail U.S. Growth

-snip-

Commerce Undersecretary Robert Shapiro, in response to questions, scorned the idea of possible recession stemming from lack of preparedness among trade partners. ``Not only will they (any glitches) not be great enough to drag down the U.S. economy but they will not even be enough to slow the U.S. economy,'' he said

``We see...nothing in economic reasoning that would lead us to expect a foreign shock down the road,'' Shapiro said. He added that some stockpiling of goods and shifts in investor behavior may occur as a result of Y2K worries but added there were few signs yet that this was occurring.

-- CD (not@here.com), November 17, 1999

Answers

http://dailynews.yahoo.com/h/nm/19991117/tc/yk_economy_3.html

-- CD (not@here.com), November 17, 1999.

On the other hand...see this U.S. Department of Commerce report:

"THE YEAR 2000 PROBLEM AND THE GLOBAL TRADING SYSTEM"

http://y2k.ita.doc.gov/y2k/y2k.nsf/dd5cab6801f1723585256474005327c8/b3 cb5b3db231dd9b85256759004baaa5?OpenDocument

-- Linkmeister (link@librarian.edu), November 17, 1999.

Here is an economist who would beg to differ on the last sentence.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001mzw

-- nothere nothere (notherethere@hotmail.com), November 17, 1999.

From an article in September:

http://www.capitolalert.com/news/old/capalert01_19990927.html

[snip]

Even if the new millennium arrives with a minimum of computer-induced hassle, though, some experts say Americans still can't become complacent, because Y2K difficulty abroad could gradually snowball into a host of economic troubles that could spill over into the United States.

A report last week by the Senate's special Year 2000 committee warned that unpreparedness in such countries as China, Russia and Italy, along with a handful of oil-supplying nations, could plunge the United States, and even the world, into recession.

"Severe long- and short-term disruptions to supply chains are likely to occur," the report said.

[snip]

-- Linkmeister (link@librarian.edu), November 17, 1999.

So, why did the WH spend $50M on a y2k tracking bunker?

S - P - I - N!

Actually, I hope they are successful at keeping the economy together and preventing panic, now that it is too late for the country to prepare.

These guys have carefully thought out what they were going to do when, mapped it out like a political campaign. This is like NERC writing the test results for the utility test six months before they ran the test. What they say has nothing to do with objective reality - whether they know that reality or not.

-- ng (cantprovideeamil@none.com), November 17, 1999.

I heard something like this on the radio news.

Sounds like have switched the media whitewashing machine to the heavy duty reverse spin cycle. They are now trying to portray the billions of dollars spent on Y2K as a "surplus" to the economy. No recession, but a boost to the economy! But where is all the money coming from that they did spend, out of thin air?

Wheeww! Wonder how many of the herd are going to fall for this B.S., probably most of them. Sooner or later all of the money that was spent is going to have to be recovered from somewhere.

-- Hawk (flyin@high.again), November 17, 1999.

Somebody please slap this idiot up side the head.

-- Nikoli Krushev (doomsday@y2000.com), November 17, 1999.

Peyote, got to be.

-- snooze button (alarmclock_2000@yahoo.com), November 17, 1999.

OT- Ok, so-- an economist in my family, whom I respect & enjoy sparring with, has been aware of this issue for several years. He sees it as a long term net gain for the states at this point. I can understand his viewpoint, but have asked him about the global effect if that turns out to be true. Already I have seen the states referred to as an 'ice cream cone in the midst of a starving world'. Is anyone else willing to ponder the long term ramifications of this scenario?

-- flora (***@__._), November 17, 1999.

I can see some idealist might imagine that long term this could lead to the rebuilding of our manufacturing base and a return to a more protectionist stance on foriegn trade, but the truth is more likely to be that the U.S. taxpayers will foot the bill for rebuilding the rest of the worlds infrastructure and what manufacturing base we have left will become noncompetitive in the face of low cost foreign labor coupled with new high tech plants.

-- Nikoli Krushev (doomsday@y2000.com), November 17, 1999.

Interesting perspective, thanks Nik.

-- flora (***@__._), November 17, 1999.

There's no way businesses can just absorb a hit like this. It is going to be passed on to consumers through price increases, raising the Consumer Price Index, and the businesses that did not fix it or can no longer compete will go down the tubes. It may temporarily increase low wage jobs, but in the long run there will be a substantial loss of higher paying jobs, and an overall increase in unemployment.

Taxes will definitely have to be increased to cover all of the government repairs and innefficiencies that we will be dealing with for many years to come. I believe that there have also been many instances in which money that the government had planned to use for other programs is now being used for emergency Y2K repairs and contingency plans, so down the road we will be taxed more to pay for a lot of projects that were temporarily put on the back burner. Then of course as Nikoli stated, we are shelling out a lot more money to help the rest of the world remediate and recover. Case in point, the I don't know how many $$billions we've been giving to Russia to make sure their nukes are secure, money that we will never see again.

Some of these stock market economists think that they can just keep cheerleading the economy right through these kinds of costs and expenses to the taxpayers, encouraging people to borrow more, have more confidence, and invest more, but if the fundamental support of the economy is ignored, sooner or later it's going to fall flat on its face.

-- Hawk (flyin@high.again), November 17, 1999.

Nik, Hawk,

Think you are dead on. Missing element is the currency war. With the Euro and Yen trying to replace the $ as the world's reserve currency, and china fighting the whole thing, economies which make it through this thing intact will win and the whole world wil subsidise them.

Read yesterday that 80% of the $100 and larger bills printed in the US leave the country to be sat on as someone's reserve.

Intresting times.

-- (cantprovideemail@none.com), November 18, 1999.