From: believer@telepath.com Subject: IP: Clinton Point-Man on 'Y2K' is Low-Balling Magnitude of the Impending Crisis Date: Thu, 12 Nov 1998 11:12:41 -0600 To: believer@telepath.com Source: Center for Security Policy http://www.security-policy.org/papers/1998/98-C181.html Publications of the Casey Institute of the Center for Security Policy No. 98-C 181 PERSPECTIVE 5 November 1998 Whistling Past the Graveyard: Clinton Point-Man on 'Y2K' is Low-Balling Magnitude of the Impending Crisis (Washington, D.C.): Today's Washington Post features an article about a few of the problems besetting the U.S. government as it grapples, belatedly, with the Year 2000 (or Y2K) "bug." In a perfect (if unintended) metaphor for the trouble on this front now confronting the Clinton Administration -- and, thanks in no small measure to its absence of "leadership" on the issue, the Nation -- the Post headline reads "Y2K Problem Poses Staffing Challenges for Agencies." Yet, the caption on an accompanying photograph quotes John Koskinen, the President's "czar" for the Millennium bug, as saying: "Y2K staffing 'has not turned out to be a major issue at this point, but we are continuing to monitor it.'" Shorthanded Unfortunately, the article proceeds to detail myriad examples that suggest ways in which personnel problems are seriously interfering with the government's Y2K remediation program. For example, the Post reports: "In the scramble to fix computers for the Year 2000, federal agencies have regularly complained that their technology experts were being lured away by better-paying jobs and that qualified contractors were difficult to find." "Of the 24 large agencies required to file quarterly or monthly Y2K progress reports, 13 expressed worries about their computer staffing or staff availability, according to a new General Accounting Office report." "[According to the GAO] four agencies - the departments of Agriculture, Justice and State and the Patent and Trademark Office - [are] facing [acute] Year 2000 staff woes: project delays because of high turnover among contractor staff and losses of skilled information technology employees through retirements and increased recruitment by private-sector companies." A 'Major Issue', Indeed Mr. Koskinen's reassurances notwithstanding, the anecdotal evidence of problems of ensuring compliance of the federal agencies is of great concern for several reasons: The government has historically had a much more difficult time than the private sector hiring and retaining qualified workers in a competitive job market. More often than not, the workers the government does retain have skill sets deemed unimpressive (read, unemployable) by the private sector. Given the complexity of undertaking a comprehensive assessment of the extent of the Y2K-associated staffing problems, anecdotal evidence is all there is to go on in calibrating the magnitude of such problems. It is a well known fact that over 80% of all large high technology projects are completed behind schedule. That the Clinton/Gore Administration continues to assert that the job -- arguably, the largest high technology project ever undertaken with an altogether inflexible deadline -- will be done on-time defies historical experience, to say nothing of common sense. Panic Prevention? The truth of the matter is that, even if the federal government were experiencing no personnel problems in preparing for the Y2K "bug," the Clinton Administration would still be dangerously "behind the power curve." After all, far and away the toughest part of insuring federal agency compliance with Y2K requirements will be the testing, re-remediation and retesting phases -- work that has scarcely even begun in most agencies. In fact, what seems to be going on here is less crisis management than panic management. Unfortunately, Czar Koskinen's wishful thinking about the staffing problem is not an isolated incident. In public speeches, media interviews and through other vehicles, he has consistently understated the magnitude of the problem while substantially overstating the government's preparedness for dealing with it.(1) Koskinen has plenty of company in the Clinton Administration, however. Indeed, even on the one occasion last July, when (after months of refusing to issue public warnings about the Y2K crisis) President Clinton and Vice President Gore finally used the "bully pulpit" to raise an alarm about this impending danger, they failed accurately to describe the severity of the problem. They also refused to take any responsibility for the significant contribution their lack of leadership to date has made to the Nation's Y2K unpreparedness -- and, therefore, to the likely intensity of the coming crisis.(2) The Bottom Line An insert next to the aforementioned Washington Post article on Y2K staffing issues reports the Federal Reserve plans to release some $30-50 billion in additional reserves late in 1999. The reason: to ensure banks will have sufficient money on hand to satisfy depositors who want to hold their savings in cash on the 1st of January 2000. As of April of this year, there was $3.6 trillion on deposit in U.S. banks. Those banks hold only some $49 billion in cash reserves. Thus, even with the additional funds available for withdrawal, banks will have at most only $2.70 for every $100 on deposit. The Clinton-Gore Administration is sorely mistaken if it believes a potentially cataclysmic socio-economic crisis will be avoided if it persists in misleading the American people. The only hope of preventing such a panic-driven outcome is for the administration to provide steady, honest leadership -- addressing candidly the unknown and greatly increasing the priority given by both the private and public sector to accelerating Y2K remediation and damage limitation efforts. - 30 - 1. See the Center's Decision Brief entitled At Last, Clinton-Gore Publicly Address Year 2000 Bug -- But Continue to Lowball Problem, Duck Responsibility For It (No. 98-C 132, 15 July 1998) and the Casey Institute's Perspective entitled New Theory For Clinton-Gore Silence on Y2K Emerges As N.P.R., Gingrich Offer Contrasting Views Of The Danger (No. 98-D 106, 12 June 1998). 2. See the Center's Decision Brief entitled At Last, Clinton-Gore Publicly Address Year 2000 Bug -- But Continue to Lowball Problem, Duck Responsibility For It (No. 98-C 132, 15 July 1998). NOTE: The Center's publications are intended to invigorate and enrich the debate on foreign policy and defense issues. The views expressed do not necessarily reflect those of all members of the Center's Board of Advisors. © 1988-1998, Center for Security Policy ----------------------- NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only. 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