THE Y2K OPPORTUNISTS
In every event, there are opportunities and opportunists. Opportunities allow savers and investors to make good decisions at specific moments. Opportunists, however, are people who look to take advantage of savers and investors through manipulation of the market. Such is the case now, with Y2K.
Scam artists are already hard at work trying to convince people that they can "protect" their money from Y2K problems with "special" convoluted programs and plans. Be leery of opportunists who try to convince you that you need to move your money into a so-called "Y2K" protected bank account.
Recently, a congressional committee heard about certain opportunists trying to take advantage of savers by selling the fear of Y2K. But, according to the government, most banks are Y2K compliant, and if not, the FDIC insures each account for as much as $100,000.
In short, your money is not going to evaporate nor will it mysteriously disappear. In fact, about the only way it will "mysteriously disappear" is if you let some opportunist try to sell you on the idea that your bank isn't ready to deal with the supposed impending problems. It's foolishness.
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Other opportunists, known as lawyers, are also out to make a new living through Y2K and its unforeseen problems. The Senate is now looking for some way to curtail Y2K lawsuits. Senator John McCain, who chairs the Senate Commerce Committee, says, "the potential drain on the nation's economy and the world economy is staggering." He's not talking about Y2K problems-- he's talking about litigation problems that could result from so-called Y2K computer glitches. By some estimates, litigation from Y2K could reach as much as a trillion dollars. By the way, that would far exceed damages sought in breast implant or asbestos lawsuits.
Senator McCain's bill would give companies up to 90 days to fix computer problems before they would have to face a lawsuit, the bill would also encourage caps on punitive damages and limit class-action lawsuits.
The bottom-line on all of this? Of course there are going to be some computer problems nationally at yearend. There were some computer problems nationally yesterday, some today, and there will be more tomorrow. Every day in our vast nation and around the world, some bank of telephones goes out, some computer system goes down, some community loses electricity for a while-these are daily occurrences. Computers crash all the time. But now, because the media has everyone so hyped up on Y2K, and the near "ending of the world," the lawyers are lined up with their lawsuits ready to fly at an unbelievable rate and size.
So Y2K does have the potential to destroy commerce in this country, but mostly because opportunists will try to pin everything that goes wrong on the event itself, feeling justified then in suing everybody even remotely associated. If you think my point-of-view extreme, just save this article, and wait and see what happens at year-end.
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Y2K aside, our economy continues to hum along impressively. First quarter growth in the Gross Domestic Product is up 4 ½ %, still above what the experts expected. In the meantime, inflation and unemployment remain low, as do interest rates. It is a near-perfect scenario, and obviously the stock market has reacted to it appropriately. Fed Chairman Greenspan and Treasury secretary Rubin continue to do a superior job in managing the economy, and as long as we don't make any major policy mistakes, there is no reason the economy should roll over into a recession.
As I've said in this column for 20 years, economies do not get tired, they do not run out of gas; economies fail because of bad economic policy. In my view, as long as Greenspan and Rubin are on the job, we'll probably be okay. But nothing is forever, and it is very possible that neither man will be in Washington at the time of the next election. That certainly is something to think about.
(Tom Butenhoff is a First Vice President with J. E. Liss & Company in Milwaukee. The views are his and not necessarily those of Liss Financial Services or the Job Connection/Hiring Network.)