NCPA - National Center for Policy Analysis

Is Y2K Panic A Self-Fulfilling Prophecy?

February 9, 1999

Overreaction to the prospect that computers might malfunction on January 1, 2000, may pose a bigger threat to the nation's well- being than the technical challenge itself, according to a host of experts and authorities.

  • John Koskinen, chairman of the President's Commission on Year 2000 Conversion, says that as it becomes clear our national infrastructure will hold, "overreaction becomes one of the biggest remaining problems."
  • The American Red Cross has already advised the public, as a precaution, to have enough food and other staples on hand to endure disruptions of several days to a week.
  • But, while endorsing this advice, the National Retail Federation has called for retailers and manufacturers to develop campaigns aimed at getting consumers to stock up gradually -- rather than trying to do so in the last few days of 1999.
  • The Federal Reserve has announced its intention to print $50 billion in extra currency -- lifting the total in circulation to $200 billion -- to assure consumers that banks will have plenty of cash on hand for those who want extra money handy at the end of the year.

To demonstrate her confidence in the air traffic control system, the head of the Federal Aviation Administration has announced that she will be flying on New Year's Eve -- as will nearly all the senior executives of British Airways.

But citizens who are alarmed that computers will malfunction are already producing measurable bounces in sales of dehydrated foods, wood-burning stoves, power generators and other survival goods. Their actions are prompted by surveys that reveal almost half of the nation's local governments have not started on Year 2000 repairs and contingency planning -- and that many small businesses lag just as badly.

Despite Koskinen's caution against overreaction, he adds that for some people, "a certain amount of panic would help."

Source: Barnaby J. Feder, "Fear of the Year 2000 Bug Is a Problem, Too," New York Times, February 9, 1999.


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