Making the least and the most of the Year 2000 bug

So, what can be done about Y2K?

Technology writer and Discovery Institute fellow George Gilder terms the attitude within the tech industry “a strange one…There don’t seem to be enough people between the positions of ‘panic’ and ‘don’t worry.’ And many knowledgeable people don’t even want to talk about it.”

Yet, some farsighted observers are willing to articulate an upside opportunity for certain companies and for society as a whole. “There are going to be a lot of different outcomes,” says technology analyst Mark R. Anderson. “Some people will suffer disasters, others will do well.”

Among the beneficiaries are companies that make replacement equipment and software, especially those with products to find and correct Y2K bugs. Similarly well-positioned are the technicians specializing in Y2K. Salaries for such people have escalated sharply.

Likewise, companies that were provident enough to prepare early and well for Y2K will find much of their competition weakened or gone after 2000. Investors who were able to determine ahead of time which companies showed such prudence and promise should be rewarded along with them.

“By 2003 or so,” claims Anderson, “the forced conversion will mean that most computing systems in the world have been modernized, which will have its own salutary effects on business and computing.”

On the public policy front, advocates of tax code simplification will gain if, in 2000, the IRS cannot process the complicated U.S. tax code. The IRS already is straining under its antiquated computer system and has botched a multibillion-dollar replacement program. It is no surprise that Steve Forbes is arguing that “Congress should adopt a low, deduction-free, flat-rate tax not just as a matter of economic wisdom but of logistical necessity.”

But trying to encourage the average citizen with predictions of all the progress that will occur once Y2K is past is a bit like telling a 14th-century European not to fret about the impending outbreak of the Black Death because, after all, it will make way for the Renaissance. Most of us want the Y2K “plague” eradicated before it hits.

If it cannot be eradicated, it must be contained. One idea worth exploring is legislation to discourage opportunistic efforts to find legal scapegoats. Trial lawyers already are holding conferences on how to make arguments for liability. But Y2K was nobody’s fault in any conventional sense, and the all-out effort needed now to combat it can only suffer if a candid exchange of information is hampered by fear of lawsuits.

State legislatures should follow the examples of Nevada, Georgia and Florida and pass legislation to prevent Y2K-related suits against state government. More urgently, federal legislation is needed, and to protect the private sector as well as the public. Of course, it may be necessary to show that a good-faith effort has been made to prevent Y2K problems. Finding a common and acceptable test for that effort will not be simple.

Still, if Ed Yardeni, the Wall Street Cassandra who was among the first to warn of Y2K, is correct that organizing against the Year 2000 problem should be seen as the equivalent of organizing for war, then some temporary legislative action is needed to prohibit the equivalent of war profiteering–either by companies or the legal profession.

Another big problem is insurance. In Britain, insurers are trying to avoid covering Y2K-related damage, while in the United States, the effort so far is to provide such coverage, partly as a competitive matter. Perhaps some sort of nationally backed insurance pool is needed. Y2K is like an earthquake or hurricane, except that its date of arrival is known ahead of time, as is the certainty that it will hit worldwide. What is uncertain is its severity or how long the effects will last. So, it is a logical subject for insurance–but not if it bankrupts the insurers.

To help assure all private purchasers of software that the products are safe to use, Y2K author Richard Bergeon has proposed a federal ruling that all software sold to the U.S. government should be guaranteed as “Year 2000-compliant.” That is an indirect, but good way of establishing a standard that also will help inform the private sector. Bergeon further calls upon the government to purchase the rights to publish the proprietary databases of companies that identify which products (hardware, software and firmware with embedded chips) have been certified 2000-compliant. Making this kind of information widely available would save vital time and money for many small companies, and, in the end, everyone.

Federal and state governments alike should require their departments to consider the data processing implications of any new legislation or other undertaking between now and 2000, as Y2K columnist Victor Porlier recommends. This is no time to add burdens to the already stressed-out public sector offices dealing with Y2K. However, those government offices should take time to provide consistent reporting on their own true state of readiness, the extent to which it has been independently verified and what Y2K is costing them. That will allow public monitoring and keep up the pressure for solutions.

The IRS, in particular, should be allowed to direct more of its information services resources to Y2K, and temporarily to put off implementation of other reforms mandated by Congress. Otherwise, as IRS Commissioner Charles Rossotti has told Congress, “If we don’t fix the century-date problem, we will have a situation scarier than the average disaster movie you see on a Sunday night.”

To the flippant, that might seem a delightful prospect, but a government that cannot collect tax revenue is also one that cannot pay for basic functions.

The House of Commons in Canada is considering a bill to provide one-time tax relief for Y2K repairs made by businesses. Something similar might be considered in the United States, an incentive that could significantly increase small-business efforts to reach 2000-compliance. (Small businesses are the most vulnerable sector of the economy now.)

The media, meanwhile, can help most by covering the Y2K issue thoroughly, not only by sorting out the facts, but also by reporting the debates (including, naturally, the views of the skeptics, if some can be found who will talk). It would be a service, furthermore, to assess local, state and federal government progress, and in the spirit of Consumer Reports and Underwriters Laboratory to make independent checks on the validity of Y2K compliance by businesses and by government. Some folks may be claiming to be prepared for 2000 who are not.

In the private sector, the technology industry should lead by contributing time and resources to assist society through education and remediation. It also can help by showing the connections that must be made among private and public sectors combatting Y2K.

It would help most if the White House saw the private sector as an ally in the effort and also strengthened the federal government’s own program to solve Y2K problems. The cultures of government and the tech industry, in particular, long have needed to communicate better. Indeed, the president himself needs to make Y2K a personal priority. From no other office can national and global leadership on the issue emanate.

There is no knowing yet how much disruption of the economy and our daily lives to expect. Billions of lines of uncorrected computer code still are unchecked. Many specific instructions are hidden in embedded chips. Certain businesses, federal departments and nations overseas still ignore Y2K, or address it so slowly that they may not make the 2000 deadline.

There is no single solution, no one-size-fits-all software answer. Repairing whole systems takes specialized professional talent and; usually, years of time. And, with only 18 months to go, talent and time are in short supply. Much depends now on public and private leadership.

The first two articles in this series described the inter-connected private and public difficulties caused by computers that may fail at the opening of the new century. The Year 2000 problem, or “Y2,” originated when computer programmers first found they could save precious digital space by dropping the first two digits of a year’s date–the century number. In such codes, 1998 is rendered as ’98, for example. But when the calendar reaches 2000, computers and software products that have not been fixed will record the year as an incomprehensible “00,” causing many systems to malfunction or crash–shutting down with them the myriad computer-controlled activities of modern society.