SOUTH CHINA MORNING POST: "Y2K expert says IT problems will drag down GDP" - interview with John Westergaard.greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
SOUTH CHINA MORNING POST
Monday, January 3, 2000
Y2K expert says IT problems will drag down GDP
A renowned Y2K expert has warned that the accumulation of Y2K IT-related glitches around the world will drag down the United States' first-quarter gross domestic product.
John Westergaard, the chairman of Westergaard Broadcasting Network.com, said his company had been engaged as a public service in studying and reporting on the Y2K millennium bug issue since December 1995.
The firm had published daily reports on the Internet at www.y2ktimebomb.com, "encompassing more than 4,000 pages of commentary by dozens of qualified analysts covering virtually every industry and economic sector at a net cost to us of over US$200,000", he said.
"In December 1995, I alerted an incredulous New York Senator Daniel Patrick Moynihan to the problem. Rather than dismissing the matter as a hoax, however, as was a common response, [Senator] Moynihan requested a study by The Congressional Research Service, which duly confirmed the authenticity and dimensions of the problem," he said.
Mr Westergaard said that in July 1996, Senator Moynihan alerted the President as to the need for immediate appointment of a "Manhattan Project" level Y2K Czar to head up a massive compliance effort by the Federal Government.
"In the face of a White House brush off, the Senator and I visited with then Secretary of the Treasury Robert Rubin and now Secretary Larry Summers on December 14, 1996," he said.
According to Mr Westergaard, following the introduction of the subject, the Secretary asked a staff member: "How much do we have budgeted for this?"
The answer, Mr Westergaard said, was $77 million.
"I responded, 'Bob, how can it be that your department thinks it has a $77 million problem and I, a plain citizen, know it's a billion-dollar problem and that's just in your department alone?'"
"Eighteen months later, [Mr] Rubin was at $1.4 billion and counting," he said, adding that many people said the Y2K problem was not going to be as bad as he and other alarmists predicted four years ago.
"The US banking system, the Federal Reserve, Wall Street, and others have done yeoman work in preparing for the main event. Merrill Lynch reports it has conducted six worldwide rehearsals," he said, adding that billions of lines of computer code had been remediated, much of it in the final months of last year.
Mr Westergaard said there would be unforeseen rollover problems extending well into January, and some extending through the balance of the year and even beyond.
"Here in the US, small business and local governments are largely unprepared. The health care system will experience a slowdown in the reimbursement process. Emergency funding of some hospitals will be required. I'm also concerned that there may be a slowdown in the transport of oil leading to a spike in the price," he said.
As a result of this, Mr Westergaard predicts that the US economy will slow down with a consequent decline in first-quarter GDP.
"There will be simply too many uncertainties surrounding Y2K causing too many decisions to be put off a day, a week, a month. Indecision is the fuel of recession. I don't see how it can be avoided. But it will be short, lasting no more than six months and probably less," he said.
[ENDS] Copyright (c) Post-Newsweek Business Information, Inc. All rights reserved.
-- John Whitley (email@example.com), January 03, 2000
Was this interview conducted pre-rollover? What kinda of track record does Westergaard have on econonmic and technology predictions?
-- joseph riley (firstname.lastname@example.org), January 03, 2000.
Westergard is one of the pioneers in bringing this issue to public attention. I remeber 2 years ago reading his posts when the government was doing NOTHING on the subject. I was working in a very large government facility at the time, and we programmers would pass his stuff around and try to figure out how to get management to pay attention to it. There was also no coverage in the press at this point. He deserves one of the medals.
-- billy d (email@example.com), January 03, 2000.
The neat thing about a prediction like this, is that no matter *what* GDP is in the first calendar quarter, you can claim it would have been higher without y2k. This experiment has no control economy to compare anything to.
-- Flint (firstname.lastname@example.org), January 03, 2000.
How many bugs fixed were insignificant? I notice that most of the bugs posted have been with dates on web sites. Does anyone truly believe that finding and fixing these bugs is worth 1.4 billio?. How many bugs were there that would have stopped delivery of SSA benefits and how much did the stock market exchanges really need to spend.
It is clear that CIOs engaged in an orgy of spending on trimming without having to make any justification for cost since "if we don't fix it we may go out of business!"
How many show stoppers were fixed? This is an important question, if the answer is, I don't know then our CIOs should be fired since Italy spent nothing and did nothing and Japan which is trading fine today didn't even bother to start remediating until this year, ditto EU because they worked on Euro Conversion until '99.
Face it US CIOs are overspending morons.
-- William R. Sullivan (email@example.com), January 03, 2000.
Maybe so, but a lot of that money went to buy new computers and new systems, so there is a silver lining. Those outfits are (hopefully) no longer patching decades-old code over and over, and will experience a productivity gain.
-- Flint (firstname.lastname@example.org), January 03, 2000.
The real question is how many show stoppers WEREN'T fixed?
-- Will (email@example.com), January 03, 2000.