Recap of December 18, 2018 Hamilton Speaker Dr. Ken Zapp,
Professor Emeritus, Economics and Finance, Metropolitan State University
Dr. Zapp talked about the role of government in a market capitalist economy. 
According to the neo-classical theories of Adam Smith, there were five roles of government: the creation of the money supply, the judicial system (especially to enforce contracts), internal security, external security, and the provision of goods and services deemed essential by society which private firms cannot provide profitably. An example is roads. Other examples (to some) are education and healthcare. It depends on what society demands.
Since the time of Adam Smith, other roles of government have developed. One is mitigating the effects of business cycles. The neoclassical solution was to do nothing in an economic downturn. “In the long term, the market will fix itself”. John Maynard Keynes argued, “In the long term, we are all dead”. He said we should react to a downturn by lowering taxes or increasing spending.
(The current Administration lowered taxes and increased spending when the economy was already strong. According to economic theory, the deficit should rise, interest rates should rise, and the interest of the debt should soar. Plus, we have little we can do when the economy turns down again).
The government can also set the rules of the game; i.e. regulations, to protect rights and ensure competition.
The government can also deal with the unintended consequences of private market activity. It must deal with externalities, that is, impacts on third parties not engaged in the market transaction. An example of a negative externality is pollution.
Government must also deal with inequalities of income and wealth caused by the workings of the free market. Egregious inequality is inimical to a functioning democracy.
Governments must also deal with challenges of technology. Who wants to live near a nuclear plant? Do we want an open market in human organs? How do we deal with internet security? How do we address climate change? Laissez-faire is not the answer. As the rate of technological change increases, so must the role of government.
At the October 15, 2019 meeting, Dr. Kenneth Zapp, Professor Emeritus, Metropolitan State University spoke to us about affordable housing. His briefing charts are provided below.
How is affordable housing defined? How effective has Savannah been in providing affordable housing? What are the problems? What new initiatives are being discussed? What are other cities doing? How did the federal government contribute to the problem? Can there be a solution without meaningful federal government involvement?
