April, 1997 

Dear ICE Subscriber:

Maybe you saw the brief report on the ABC Evening News (March 10) on the Year 2000 Problem. This story is now moving from specialized computer magazines into the mainstream media. It will take time for people to understand. They will not grasp the magnitude of the threat until it's too late. When a major system goes down, panic will spread. It will become very difficult (i.e., impossible) to buy home power generators, bulk grains packed in nitrogen, and specialized high-efficiency refrigerators and freezers.

On March 11, I did an audiotaped interview with the owner of Walton Feed in Montpelier, Idaho: http://www.waltonfeed.com He told me that 1996 was the best year his firm ever had — so good that he was back-ordered for over six months. If there had not been a good wheat crop, worldwide, in 1996, he would not have been able to fill his orders.

That's the problem in every area of the economy. Supplies are thin. The computer revolution has reduced the level of inventories needed to sustain a business. Just-in-time manufacturing has grown up alongside overnight inventory re-stocking. Wal-Mart is the acknowledged master here. Think of survival items as Tickle-Me-Elmo last November.

Another example: a Florida coastal city that is facing a hurricane. Try to buy flashlight batteries an hour before it hits, let alone a day after. Try to buy bottled water. Old-timers store extra supplies. Mid-timers get into their cars and head for the supermarket the moment the weather bureau says a hurricane is possible. The rest of the population waits around until it's a sure thing; then they find depleted shelves.

The average urban supermarket is re-stocked every three days under normal buying conditions. What happens if the means of payment goes down? What if banks are hit with panic-driven runs? What happens if they lock their doors? How do we pay for the re-stocking of the local supermarket? If the Federal Reserve prints up buckets of cash, what happens to the price of that item that you literally can't live without?

The problem here is the modern division of labor. If it shrinks, we get a depression. If it collapses, we get a worldwide catastrophe. Mainframe computers store information. If the cost of accurate information doubles, triples, or worse, the division of labor will shrink. If it becomes unavailable temporarily at any price, the division of labor could collapse. Urban life is possible only because there is a reliable money system, rail freight delivery, and predictable civil government. All three are dependent on mainframe computers.

The Old Testament repeatedly speaks of three judgments: famine, pestilence, and war (sword). We may be able to avoid war, but if the banking system goes down, urban rioting will surely be an effective substitute.

An ICE Web Site

I have set up a Web site on the Year 2000 Problem. On it, I have posted articles and government reports that deal with the problem. I have included my own assessments of the importance of each article. There are a lot of Web sites devoted to y2k. ICE's is introductory. I have posted in one convenient location some of the more important documents that I've come across. I hope to continue to add more documentation to the site.

Let me give you some highlights. Social Security has 30 million lines of code to go through. This does not mean that they have 30 million lines of code to repair. It means that some percentage (say, 10%) of the 30 million lines needs repair. They began making the repairs in 1991. By mid-June of 1996, they had completed work on 6 million lines. They had 24 million lines to go. Their self-imposed deadline date: December 31, 1998.

Now let's talk about a far more important organization: AT&T, the largest of the U.S. phone companies. According to a report in Computerworld last fall, AT&T has 500 million lines of code to check. The company says that only 5% to 10% of these lines will need to be repaired. This means 25 million to 50 million lines.

Now, let's go back to Social Security, which has 30 million lines to go through, not actually repair. With 400 in-house programmers working part-time on this project for five years, they had completed a mere 20% of the overall task as of last June. But AT&T has as many lines to repair — possibly more — as Social Security has to check.

Sprint has 100 million lines of code to check. MCI refused to say how many lines of code they must go through. In short, the world's phones may go down in the year 2000.

The Department of Defense has 358 million lines of code, much of it in archaic computers using 40 different languages. What if its communications system goes down?

The Washington Post reported that the United States will need at least additional 500,000 mainframe programmers, and possibly 700,000, over the next three years. This doesn't mention what Europe needs. Or Japan. Problem: there are not 500,000 mainframe programmers in the United States, and they are not being trained. There is therefore no way to solve the Year 2000 Problem. Plan accordingly. I have posted these reports at: http://www.remnant.org

I was two printed articles that I have summarized on my site. One reports on Citicorp, the largest bank in the United States. It has 400 million lines of code to go through. The bank claims that only 5% to 10% of this code will need to be fixed. That's 20 million to 40 million lines of bad code. The bank's information department informed the president of Citicorp in 1996 that the problem exists. The other report says that Chase Manhattan Bank has 200 million lines of code. These are our two largest banks.

I have seen nothing on Japan's banks. Japan has at least seven of the ten largest banks on earth, and all of them have major capital problems today. Throw in y2k, and things do not look rosy. One-third of Japan's population is within commuting distance of Tokyo. When you're thinking "urban vulnerability," think Tokyo.

How Serious?

One of the men I interact with on-line has been a COBOL programmer for 20 years. He is now employed by a large firm to run its division devoted to helping large firms solve the y2k problem. He works in Dallas. I received an e-mail from him a few weeks ago. He told me that he was planning to move to N.W. Arkansas in 9 to 18 months. Two weeks later, I received another e-mail: he is planning to move there by September of this year.

He is convinced that most of the organizations that are vulnerable to their own computers will not repair them in time. They will go bankrupt. Then all of those organizations that are dependent on them will then be faced with enormous supply problems. He tells me that there are about 250 separate mainframe computer systems running the government of Texas. He does not expect most of them to be Year 2000-compliant in 2000. He is determined not to be caught in a city when major systems start shutting down. His father has developed a unique grass that produces four times the output of normal cattle-feed grass, and he plans to take over the small family business. Understand, he is going to do this at a time when COBOL programmers will be earning $100 an hour, then $200, and probably over $200 in 1999. This lure is not enough to keep him in a large city.

A few months ago, I wrote a report in Remnant Review, "An All-or-Nothing Bet." Prof. Leon Kappelman got a copy of it. He teaches in the business computer department of the University of North Texas. He also is the co-chairman of the Year 2000 Working Group of the Society of Information Management. These are the people who run the mainframes. He asked me to let him reprint that report as a chapter in his forthcoming book on the Year 2000 Problem. It is aimed at professionals in the mainframe computer field. My somewhat apocalyptic scenario is at the outer edge of acceptable y2k discourse, at least for now. I find it interesting that it is considered suitable for mainframe computer senior managers.

My goal is to have ICE do a mailing to pastors. It will be a 5 by 8 postcard with very small print. It will briefly survey some of the problem areas and then direct the recipient to visit ICE's Remnant.org site. This way, I can get the word out for about 33 cents per name. If I printed the free report that I give away on the site, it would cost close to $1.70 to mail. I'm hoping that enough pastors have e-mail to make this strategy work.

If pastors are alerted early enough, they may be able to prepare their congregations in early 1998, when some items will still be cheap enough for most families to buy (I hope). I have a timing problem. If I alert pastors too soon, they won't respond. They'll think my version of the story is impossible. They'll toss out the postcard. But if I wait too long, I will not have served as a watchman on the wall, since people will not be able to do anything to defend their assets. I would rather send out my warning too early than too late.

This crisis is going to undermine governments all over the world: family governments, church governments, and civil governments. We will see a series of presently unforeseen shifts in authority and power. Power flows to those who will take responsibility. This is why local churches will be in a tremendous position to reclaim the authority that the State has siphoned off over the last century.

On the other hand, if congregations huddle in the shadows, vainly hoping for the Rapture, they will forfeit this opportunity. They will not be there to help. I think this crisis will be sufficiently painful that horror stories about the coming Great Tribulation will cease to shock many people in the pews, especially by 2010. "If we got past the Millennium Bug, we can get through the Great Tribulation!" They will begin thinking about civic renewal.

In central cities, gangs will provide local leadership and protection — at a price. If several hundred Los Angeles police officers had trouble with two bank robbers in times of relative peace, think about what the 100,000+ gang members in L.A. county will be able to do when the computers go down. Meanwhile, if the mainframe computers that control traffic lights in Los Angeles (or any big city) are year-sensitive, can you imagine the chaos? You had better find out soon whether your city's signals are run by a date-sensitive mainframe.

The problem with the division of labor is that it works so well. We have become totally interdependent. But it all rests on reliable money. If the means of payment collapses, the division of labor collapses. If we can't get a dial tone, there goes Western civilization.

I hope and pray that the telephone companies and the banks — all of the banks — get their repairs made, fully tested, and ready to go by early 1999, before panic hits, but I don't think they can. That means that I must take action when my brain tells me I must. If I wait for my stomach to confirm my brain, a lot of other people will be taking action. They will bid up the price of effective action. The free market's auction will work to destroy the banks. Bank runs will begin at some point prior to the Year 2000. The long-term capital markets will be undermined by fear of a banking collapse. Nobody is going to lend money for 30 years at 8% who thinks that the banks may close next week or the government may go bankrupt in 2000. Mortgage markets will disappear. You had better be where you want to be before this happens. You had better own what you will need to own on Jan. 1, 2000. Better to be a year too early than five minutes too late. Procrastination kills.

Sincerely yours,