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Summary and Comments

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Category: 

Introduction

Date: 

1997-11-11 18:33:28

Subject: 

Economist Ed Yardeni's Mini-Book on Y2K: Very Informative

  Link:

http://www.senate.gov/~banking/97_11hrg/110497/witness/yardeni.htm

Comment: 

Ed Yardeni, economist for Deutsche Morgan Grenfell, has written an excellent introductory book on y2k. It is posted on the Web site of the Senate Banking Committee. This is a good document to download, read, and mail to friends and relatives. Dr. Yardeni dismissed y2k as a non-event in June, 1997. He has since changed his mind completely.

* * * * * * * *

I have spent the past six months collecting as much information as possible on Y2K. Based on what I know so far, I believe there is a 40% risk of a worldwide recession that will last at least 12 months starting in January 2000, and it could be as severe as the 1973-74 global recession. That severe downturn was caused by the OPEC oil crisis, which is a useful analogy for thinking about the potential economic consequences of Y2K. Just as oil is a vital resource for our global economy, so is information. If the supply of information is disrupted, many economic activities will be impaired, if not entirely halted. . . .

I am amazed by the lack of concern about Y2K by our political and business leaders, journalists, and the general public. The widespread mantra I hear over and over again is "Bill Gates will fix it." The official position of Microsoft is that this is a problem that everyone must fix on his own. It is too big and overwhelming for even Microsoft. . . .

No single individual or corporation on this planet can solve this problem for us. There are no quick and easy miracle drugs to make this depressing issue go away. Y2K can be fixed, but it will require a huge coordinated community, national, and global effort. We must also prepare for disruptions in the event that Y2K isn't completely fixed by the turn of the century. . . .

Over the past 12 months through July, average hourly earnings for software programmers are up only 6.1%. This is another indicator suggesting that companies are not panicking about their Y2K problem. There have been many predictions that IT compensation will soar as demand for skilled talent overwhelms supply. It could still happen, but so far there is not even a hint of this scenario in the wage data that are released along with the monthly employment report by the Bureau of Labor Statistics.

Link: 

http://www.senate.gov/~banking/97_11hrg/110497/witness/yardeni.htm

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