Fifty-two years ago, President Franklin D. Roosevelt declared that Dec. 7, 1941 - the date of the Japanese attack on Pearl Harbor - was a day that would "live in infamy."
Sen. Bob Bennett, R-Utah, made it clear to Utah's bankers Wednesday that Dec. 31, 1999, is starting to look awfully infamous as well.Yep, it's that old bugaboo Y2K again, the acronym that will live in infamy, the shorthand for the year 2000 computer problem that Bennett believes is a virtual lock to create a worldwide recession 18 months from now.
Using tactics right out of "Scared Straight," Bennett told the bankers that they had better forget about delegating their in-house Y2K compliance problems to their computer gurus or information officers. This is a task that bank chief executive officers had better move to the very top of their agendas.
"You CEOs here, this is your problem, not your CIO's (chief information officer's). Time is desperately short. You have to look at priorities and contingency plans. Remember, your shareholders will hold you responsible if things don't work."
The Y2K problem, of course, is quite simple as computer glitches go. For years, computer code has been written using only the last two numbers of a date, such as '98 for 1998. But when the big silver ball drops in Times Square declaring that it is now the year 2000, non-compliant computers are going to think its 1900 or 1800 or maybe they'll just fry their circuits trying to figure out what it means.
None of those possibilities are happy scenarios for financial institutions and their customers, whose lives and fortunes currently exist only on bank computers as a long series of ones and zeroes. To correct the problem requires rewriting of computer code going back a generation. A daunting task for any company.
Bennett understands that his dire warnings on the potential horrors of Y2K make him sound a bit like Paul Revere - the British are coming - or Chicken Little - the sky is falling. He doesn't really care so long as the message is heard and heeded.
He takes to heart the warnings of Edward Yardeni, chief economist for the international investment firm Deutsche Morgan Grenfell,who began a year ago calculating the odds on a world recession stemming from Y2K. He initially said there was a 30 percent chance of a recession, then moved it up to 35 percent, then, when it became clear that businesses weren't taking it seriously enough, 60 percent, and now his latest prediction puts the odds of a worldwide recession at 90 percent.
For his part, Bennett said the only real question now is how deep the recession will be and how long it will last.
Furthermore, said Bennett, even if American businesses go all out on the problem, throwing big money and big talent at it so that their own companies become Y2K compliant, it's not going to stem the tide because overseas companies and governments are even further behind.
"Are you prepared to not get a dial tone when you call overseas branches?" Bennett asked rhetorically. Or how about not being able to get money in or out or that airplanes will be grounded? For that matter, even in this country, companies that are not Y2K compliant now will be hard pressed to meet the deadline because the testing of new programs comprises 70 percent of the work load.
Recent news articles on the Y2K problem have run the gamut from predictions of complete disaster to nothing more than a "bump in the road." Bennett concedes that he doesn't know for sure what will happen and neither does anyone else, but he notes that any business that is not working on the problem and which does not have contingency plans if the worst-case scenario comes to pass is courting disaster.