Proportion

Better to Worry About the Y2K Nuts than Y2K
Reuters, March 11, 1999

Two of Washington's top trouble-shooters for the year 2000 computer problem 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 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 new year. "Actions that individually look logical - like filling up your gas tank on December 31, taking US$1,000 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 US authorities, and small businesses are ill-prepared for computer failures, they told a panel discussion, 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. Kelley said the Federal Reserve - the highest US financial institution - doesn't foresee any reason for a surge in demand in cash at year's end. But it plans to have $50 billion of cash ready to meet consumer withdrawals spurred by fears of bank computer failures. "Probably the most important single element ... 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.