Reply to George -- First steps toward a Y2K cost-benefit analysisgreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
I'll do my best to address each of your points in the spirit in which I trust you meant them. Your original material is in [brackets]...
[Y2K was/is still a trillion dollar problem yet to be solved. No solid, sustainable, unified theory of Y2K has yet been proposed and agreed upon, even by pollies.]
Uh, you have two sentences there. The first repeats the trillion-dollar allegation as though it were fact. The second admits we lack anything solid to agree upon. How can both be true?
[(1) Y2K litigation costs are still Y2K costs, whichever way we slice them. Even if lawsuits are against consultants, IT vendors, etc., on the basis of having induced unnecessary Y2K remediation (gaining force everywhere, worldwide), it's still a Y2K cost, you can't get away from it.]
Agreed. Any cost associated with explicit y2k litigation, either alleging failure to repair properly or alleging billing for services unnecessarily rendered, is a direct y2k cost. However, there haven't BEEN any of these, to my knowledge. Nor am I familiar with any even being prepared. IF any such suits come to pass, I'll be glad to add both litigation cost and settlement amount to direct y2k expenses.
[Furthermore, litigation costs have yet to show their truly ugly heads, both ways. That means that pending litigation could be for Y2K non-remediation or non-performance as well as Y2K unnecessary/excessive remediation. Let's not forget either the 90-day forced "truce" imposed by Y2K legislation. When litigation figures are finally known (maybe months or years from now) the one trillion figure could actually turn out to be short.]
Absolutely. BUT, such litigation costs are currently speculative, whereas your argument (as I understand it) is that the trillion dollar figure is current. You are manifestly counting chickens before they're hatched, and finding a huge number of said chickens. How about we wait and see before counting all this litigation money, OK?
[(2) Kappelman, Caper Jones and others agree that US spending was above $200 billion.]
This is news to me, I admit. Interesting that nobody has bothered to post such agreements on any TB2K forum yet (that I've seen, and I try very hard to follow all threads discussing y2k). You are quite correct that over a year ago, these people and others made estimates and projections of this magnitude. But I am trying to address what HAS BEEN spent, and NOT what someone in the past guessed MIGHT be spent. The closest I've seen to a *measurement* of expenditures rather than a "guess before the fact" was from the President's y2k Council (Koskinen's outfit). Their esitmate of US expenses *actually spent* was on the order of $100 billion, of which $8.5 billion was spent by the Federal Government. If you have anything more current and addressing money actually spent, I would be glad to see it.
[Considering that 75% of world code was/is outside the US, that accounts for several hundred billion more. And, in the event that others did/spend little/nothing elsewhere in the world, it's still a multi-billion dollar problemo, as that spending wasn't needed apparently, even in those places that did it. And don't try to tell me that Italy, Russia and Germany arenot IT rich countries. Actually, banks, insurance, social security everywhere are date dependant (think India, China, Brazil, Paraguay, etc.) and the date bug should have attacked them as well, right?]
When you say "that accounts for several hundred billion more", what sources are you referring to? To me, that sounds like a seat-of-the-pants estimate, based on nothing more than a SWAG about how international exposure might have compared to US exposure. Since to my knowledge NO DATA exist in such form, I strongly suspect that you simply *made up* this number. Which is NOT to say it can't be a good ballpark estimate, of course. It could be *anything* if we have NO DATA. So I ask you directly, George. WHERE did you get this number?
[(3) Because of the sheer importance of Y2K, TPTB, plus every corporation in the world, every major industry in the world and, consequently every plant and SMB factory in the world, took the wise and mandatory decision to shutdown for 2-3 days minimum, many 4 days (Dec.30-31 thru Jan 3-4), a truly unprecedented event.]
This claim also requires evidence, of which I confess I have very little. I know the utilities didn't shut down, since everyone had power everywhere. I know several US banks were open that weekend. I know my own employer (a major manufacturer, Fortune 200) didn't shut down a single assembly line. And although I tried to follow TB2K very closely and read everything after rollover, I don't recall any article our busy beaver researchers could find saying anyone had closed down -- but they found *plenty* of speculation before rollover that shutdowns *might* happen where they usually do not (24x7 operations). So again, WHERE ARE YOUR DATA?
[Furthermore, powering up wasn't easy, and certainly not cheap.]
Well, we're talking hindsight and actual measurement here, NOT speculation anymore. So tell us, WHO shut down, and HOW MUCH did it cost ANYONE to power back up. Even a single *documented* example will be very welcome. Otherwise, I must consider this to be guesswork.
[Out of spec production, lost production in still mills, refineries, etc., means low productivity, lost revenue, etc., etc. All of the above means at least 0.5% of worldwide GDP, probably much more. That's also several hundred billion dollars worth.]
Sigh. Name ONE ITEM produced out of spec as a result of a shutdown. Name ONE steel mill or refinery that shut down. I'm sure you can name many. I can't. But I caution you, these would have to be *abnormal* shutdowns. Otherwise, by definition there is no loss. My employer shuts lines down often, for maintenance or lack of work. Keeping such lines *going* would be the loss.
[(4) Obviously enough, TPTB , including the CIA, the FBI, the US Congress, the Federal Reserve, every bank and insurance company in the world, every government in the world and, of course, the White House, did NOT think that Y2K would be (a) "benign" and (b) not pervasive, which you Flint have always been so sure of, despite the fact that you prepped up as much as you possibly could. So TPTB sponsored/supported multi-billion dollar spending, worldwide.]
I confess I have a bit of trouble parsing your meaning here. So let me take some guesses and hope I hit the target. (1) Correct that nearly everyone saw the *potential* for risk, and many took steps to reduce that risk, which cost money. This is not denied. How MUCH they spent is at issue. (2) I think you would be very hard pressed to find ANY indication that I was "so sure" things would be benign and not pervasive. I considered widespread serious problems to be of low probability, and revised my estimate downward as rollover approached and nothing was happening. But those probabilities could never be reduced to zero. (3) TPTB did sponsor/elect to spend in multi-billion dollar amounts. No doubt about it. But how many is multi? A trillion is a very large number of billions, you know.
[(5) Now if you were correct Flint, this means that (a) every single one of worlwide PTB were wrong in their assessment capacity and in their decision making process or (b) Y2K was a one trillion dollar hoax sponsored and supported by them.]
George, I'm sureyou can do better than this. TPTB assessment-of-risk correctness was all over the place. Some did nearly nothing (like my own state of Alabama), while others did what turned out to be far too much. Some operations had very little exposure (like utilities), while others (like banks) had a great deal, and spent massively to reduce it. What's ironic is that *before* rollover, you were very concerned (in my opinion justifiably) that most of the world wasn't spending nearly enough. *After* rollover, you somehow decide they spent far too much!
To me, this sounds like an effort to have your cake and eat it too. You feared y2k would cause global calamity, and it did not. So NOW, you fear the (undocumented) HUGE expense must have been the calamity. But one way or the other, you are *determined* to find a calamity in there somewhere. George, you were wrong before, and cannot find any hard data saying you aren't wrong again. Or if you can find it, you do not choose to refer to it.
[Either (a) and/or (b) would mean that we are all in the hands of an unreliable bunch of two-bit pricks that shouldn't be respected or believed, let alone followed, and that you Flint have been basically right all along and have thus revealed to the whole world the largest, best-kept, most expensive conspiracy in the history of mankind. In that case, if proven true, congratulations Flint.]
Well, I fail to see how your heavy handed sarcasm supports or furthers your case. By all *current* indications, most organizations spent appropriately for their needs, as you'd expect since they *knew* their needs. Some overspent, but very few overspent by an order of magnitude. A few visible pundits (Yourdon, North, Westergaard, Paula Gordon, Kappelman, Roleigh Martin) probably contributed to some of the unnecessary spending, but of course how much (if any) can never be measured.
And in all of this, I notice you do not address the issue of spending that was multipurpose or tangential. This is, IMO, a very significant omission.
Item: We have many many testimonials that IT departments everywhere used the y2k excuse to purchase all the goodies they ever wanted but couldn't get. Some of this expense was purely raiding the cookie jar, and much of the expense was known to be less than pressingly necessary, even if y2k related.
Item: An estimated 25% of large businesses switched to ERP packages like SAP or PeopleSoft in the 3 years preceding rollover. Many, perhaps most, had it in mind to do this sooner or later anyway, and y2k either pushed them over the edge or accelerated their schedules. Some of the largest expenses were associated with these switches, but they can hardly be considered a "pure" y2k expenditure.
Item: According to multiple sources (*some* of whom are likely reliable), a lot of embedded devices were replaced unnecessarily, because they had cosmetic y2k issues and the companies wanted to "clean their checklists" of every "issue" their assessment had located. Playing it safe was sometimes carried too far.
Item: A great deal of the "remediation" expense went into replacing aging hardware, performing long-overdue software upgrades, creating documentation of everything from code to systems to inventories to runtime interrelationships, and modernizing generally. Several commentators in technical journals have been arguing rather stridently that the entire y2k effort, far from being a net cost, has been a net *benefit*.
Finally, you have fallen into the black-or-white trap of trying to determine if y2k was a hoax or it was not. This effort is inappropriate, in my opinion. Y2k was essentially a non event, but nonetheless there was a small minority who sincerely expected it to be much worse. And there were probably those who *predicted* it would be much worse than they expected, for reasons discussed on other threads -- financial gain, careerism, publicity, whatever.
But without question there were countless millions of date bugs in our code everywhere. Nobody has ever denied this. The problem was very real. *Predicting* what those date bugs would do if left uncorrected was never possible, and spending big money to correct them was considered cost-effective (in advance) by many. In retrospect, the minor problems experienced by those who did little or no remediation suggests that the cost-effectiveness of remediation was widely overestimated. But if you want to claim we couldn't have known this in advance, I won't argue.
Anyway, I confidently await your documentation of this trillion dollars, since it actually WAS spent (you say), so it's a matter of record. And BOTH of us can await the expiration of the 90-day "truce" on lawsuits, and see what happens. OK?
-- Flint (firstname.lastname@example.org), March 07, 2000
My apologies for posting this without noticing someone else had made an essentially similar response. I'll try to look more carefully next time.
-- Flint (email@example.com), March 07, 2000.
For the time being I have very little to add to what I've already said Flint. But I still appreciate your time, effort, and constructive input, without which this forum just wouldn't be the same.
I'm also keeping very busy these days (fortunately) and can't spend long hours digging up stuff, etc. But you sure can, so go at it, not only with poignant intellect but also with plain, old Will Rogers/Sam Houston common sense, if you know what I mean.
Concerning Y2K litigation costs I mentioned there are a couple of web sites that are following up on that. I'll let you know their URLs ASAP. Also, if the "one-trillion dollar problem" at hand bothers you so much let's settle for a "several-hundred-billion dollar mystery" yet to be solved. Because, like you say Flint buddy, the glorious state of Alabama did almost nothing and still works fine, doesn't it? Maybe in a year's time Alabama does not work as fine as it should (let's hope not) in which case you would surely reconsider your bold/conceited assertions of today. Or maybe Alabama keeps working fine for years yonder, in which case we should find a valid, solid explanation for the enormous expenditure that many other States DID spend, let alone the Federal government, without any need. In the meantime Alabama is and will continue to be living proof. Actually entire companies (SMBs in particular, worldwide) and entire countries did the same (or almost) as Alabama. So, with time, we shall see how many Y2K problems the Alabamas of this world end up having, or not. In which case we should be very much concerned with the enormous, needless expenditure incurred by the non-Alabamas of this world, including items such as the $50 million dollar DC bunker.
At any rate, I sure hope you always keep being right Flint. And if not, still God bless you, 'cause you'll always be OUR Flint, whatever comes.
-- George (firstname.lastname@example.org), March 08, 2000.
Judging by the lack of posters to this thread, I guess that Y2K cost- benefit analysis is either not important or a boring subject to most forumites, right? Or maybe the perception is that Y2K costs were low. Yeah, maybe that's it.
At any rate, I still think otherwise and sure wish you keep up with Y2K soul-searching proposals for others to follow. I hope you attract a large crowd, although for the time being we are pretty much all alone Flint. Unbelievable, isn't it?
-- George (email@example.com), March 09, 2000.
I'm afraid so. I think we're seeing the difference between asking for an opinion and asking for an *informed* opinion. That adjective is a major disqualifier, it would seem.
Maybe I should ask which TV shows are worth watching?
-- Flint (firstname.lastname@example.org), March 09, 2000.