Isn't it possible that there will be a shift in the economy with those businesses that were prepared taking the clients from those who weren't. Similar amount of business but shifted?

-- Not So Convinced (hypno_ut@yahoo.com), December 13, 1999

Answers

NSC, I have felt what you have described will be true to a point. Companies taking over those that have gone bankrupt. Companies merging into each other. A period of flux while it shakes down. A wide variety of widgets still, eventually, available on the open market.

However, aren't there consequences here? Maybe I don't need so many brands of soda and detergent and catfood to chose from, but aren't there quality of life issues if, for instance, a significant number of mom & pops disappear from their communities? These are some of the concerns I have with regard to how my own town will fare as a result of y2k.

-- Brooks (brooksbie@hotmail.com), December 13, 1999.

And what about layoffs from these failures? There are so many possible impacts it's hard to speculate at this time. Prepare for the worst and hope for the best.

-- Mara (MaraWayne@aol.com), December 13, 1999.

Those who lose there jobs will work for those who were prepared. I work at a dealership and if other dealers are not prepared we will sell more because we are. If our volume increases we will need to hire salesmen from those dealers that weren't preapred.

-- Not So Convinced (hypno_ut@yahoo.com), December 13, 1999.

You mean like FedEx stepping in when UPS was on strike and, as a result, permanently retaining a portion of that windfall business?

Sure, quite likely, especially in the lesser-BITR scenarios. This is one of the ways free markets work. If I am prepared to offer services that, for whatever reason, my competition cannot, I have one heck of a competitive advantage.

-- Arnie Rimmer (Arnie_Rimmer@usa.net), December 13, 1999.

Is this a serious question?

Of course this'll happen, the questions are: how much global productivity will we lose (factories at a standstill/people out of work is REAL cost); and how long will it take for supply to catch up with demand again.

The range of estimates runs from none and no time, to everything and never. The truth is probably somewhere in the middle.

Actually, I think this might just be a troll. In which case, I've fed it. DOH. Ah well. :(

-- Servant (public_service@yahoo.com), December 13, 1999.

Which Government will take over our Government if it fails? China? Russia? If anyone of the Power,Telecomunications,Oil,Banking industries go down how will this effect the companies that are prepared? If the public preceives problems and panic sets in, the financial markets will be toast (burnt Toast). The financial markets are a pyramid scheem just waiting for the rug to be pulled out from under it.

On the other hand, there is a posability that nothing could happen and the D.J.I. stock market will go to 20,000. And the feed the starving food banks will have the best year ever:>)

-- Gambler (scotanna@arosnet.com), December 13, 1999.

>> Isn't it possible that there will be a shift in the economy with those businesses that were prepared taking the clients from those who weren't. <<

Short answer: Yes.

The problem with the short answer is that it leaves far too much unsaid. It doesn't address the fact that not all businesses or industries are equally important. For example, failures among local phone service providers or electric utilities have a far greater impact than the same number of failures among toymakers.

It doesn't address the fact of what percentage of businesses in an industry can fail before the effect is overwhelming. A few failures scattered among dozens or hundreds of succeeding businesses that provide the same service would be absorbed without a blink. But a few successes scattered among dozens or hundreds of failures would take years of readjustment.

It doesn't address the fact of interdependencies among businesses. Take several oil refineries offline due to Y2K and let petrol prices rise, and some trucking businesses may fail regardless of their Y2K success.

Clearly, if a need exists someone will eventually try to fill it and make a business out of it. That is simple, classical economics. It describes the mechanism that tends to bring an economy into equilibrium. The real question is how much disequilibrium will Y2K cause in the economy? A little, and it is easily absorbed. A lot, and we may be knocked down for a long count before we get back up on our feet.

-- Brian McLaughlin (brianm@ims.com), December 13, 1999.

Maybe we should ask John K.(forgot how to spell it) this question. At the same time we should ask how long it would take to reestablish our shoe and sewing factories, auto parts manufacturing facitities, most of which has been dismantled where I live, and moved to some foreign labor market. Even the generators we purchase have foreign components. Its been long known this country survives upon her service organizations. When it comes to meeting our needs with hard goods, look overseas. I have and it doesn't look good.

-- Tommy Rogers (Been there@Just a Thought.com), December 13, 1999.

If you would to read more on this point, go to Dennis Grabow's website. Dennis was a VP at Morgan Stanly and worked in the Ford administration. He is now the CEO of Millennium Investment Corporation. He has some very interesting thoughts on what he calls the greatest Transfer of Wealth Issue in the 20th century. The URL is millenniuminvest.com. His testimony before congress is on there, as well as, quite a few white papers on the topic.

-- for real (for@real.com), December 13, 1999.