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Sermon: Overwhelmed

1/29/2017

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By John Kessler, The Pointe Church, January 29, 2017
​Part one in a series of six sermons delivered in the winter of 2017 at The Pointe Church in Fort Wayne, Indiana. John's sermon begins at 1:27. ​http://www.thepointechurch.net​
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Sermon: Overwhelmed

1/22/2017

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By John Kessler, The Pointe Church, January 22, 2017
​Part one in a series of six sermons delivered in the winter of 2017 at The Pointe Church in Fort Wayne, Indiana. John's sermon begins at 1:27. ​http://www.thepointechurch.net​
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Sermon: God's Purpose In Our Work

9/4/2016

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​By John Kessler, The Pointe Church, September 4, 2016
​Part two in a series of ten sermons delivered in the fall of 2016 at The Pointe Church in Fort Wayne, Indiana. John's sermon begins at 0:35. http://www.thepointechurch.net​
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Sermon: How to See God

8/7/2016

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By John Kessler, The Pointe Church, August 7, 2016
​Part six in of eight total series called, "Life Hacks." Delivered in the fall of 2016 at The Pointe Church in Fort Wayne, Indiana. http://www.thepointechurch.net​
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Sermon: Stay Hungry

7/24/2016

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By John Kessler, The Pointe Church, July 24, 2016
​Part four in of eight total series called, "Life Hacks." Delivered in the summer of 2016 at The Pointe Church in Fort Wayne, Indiana. http://www.thepointechurch.net​
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Sermon: The Right Approach to God's Will

2/14/2016

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​By John Kessler, The Pointe Church, February 14, 2016
​​Part of a series delivered in the spring of 2016 at The Pointe Church in Fort Wayne, Indiana. http://www.thepointechurch.net​
​Esther Brock at 37:19:
I'm in tears. What a beautiful message! Here's my heart Lord! ❤️ Thank you John for reminding me to run to Him, not from Him! ??

Debbie Ackerman at 12:13:
Wonderful message John. Heres my heart Lord...
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The Economics of a Public-Private Partnership

12/15/2015

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By John Kessler for the Indiana Policy Review Winter 2015 print and online editions.
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Lucas Oil Stadium, Indianapolis, Indiana.
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​John Kessler, M.A., an adjunct scholar of the Indiana Policy Review Foundation, marathon runner and one-time track coach, is a continuing lecturer in economics at Indiana University-Purdue University Fort  Wayne. To book John Kessler to speak at your event, click here
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Abstract: “Public-private partnerships” is too often public in terms of costs and private in terms of results. We need a more publicly honest conversation.
T​here has been a trend recently in economic development circles to encourage public-private partnerships. In this kind of partnership, the government partners with a private business to pursue some sort of project.  Typically, the government gives taxpayer money directly to the business as a subsidy to pursue the project or they guarantee a loan to help finance the project. To the politician and business this kind of partnership is a great idea – the politician gets to take credit for “creating jobs” and the business has some protection from losing money.

I have four concerns we should consider before pursuing a public-private partnership. First, we have to ask ourselves, what would the taxpayer voluntarily choose to spend their money on instead of this project? With public-private partnerships we see taxpayer money being spent on a new project but what we don’t see is what the taxpayer would have spent that money on instead if they had been allowed to keep their money. This is important because politicians want to take credit for creating jobs. What we must remember is that all they are doing is creating jobs in one area at the expense of jobs having been created in a different area. They are merely shifting jobs around instead of creating new jobs.

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Sermon: Catching Joy Everyday

11/29/2015

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​By John Kessler, The Pointe Church, November 29, 2015
​Part six in a series of six entitled, "Catching Joy" delivered in the fall of 2015 at The Pointe Church in Fort Wayne, Indiana. http://www.thepointechurch.net​
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The Role of Government

8/27/2015

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​By John Kessler for the Indiana Policy Review print and online versions, August 27, 2015

​Government has its place, and problems arise when government abdicates that place or wants more than that place.

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John Kessler, M.A., an adjunct scholar of the Indiana Policy Review Foundation, marathon runner and one-time track coach, is a continuing lecturer in economics at Indiana University-Purdue University Fort  Wayne. To book John Kessler to speak at your event, click here
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John Kessler is an adjunct scholar of the Indiana Policy Review Foundation and head of the IPFW Center for Economic Education, where he lectures as an economics instructor. This essay is based on remarks delivered to IPR’s 2015 summer seminar. To book John Kessler to speak at your event, click here.
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Printable version via PDF
As a city councilman, you cannot address the questions on any agenda until you have decided the role of government: What should government do or not do? Economists, of course, have been thinking about this question for a long time. They can tell you two things that the government should do and a few that they shouldn’t.

What they should do falls into two categories: the “protective” function of government and the “productive” function.

The Protective Function — Government should protect our property rights through the legitimate use of force (police, military) and enforcing contracts through the legal system. When the government does this well citizens can go about being economically productive because they know they can reap what they sow.

The Productive Function — Government should provide certain kinds of goods that have special characteristics that make them difficult for the market to provide. These are called “public goods” (i.e., broadcast television, national defense). Public goods have two characteristics: a) non-rival, i.e., making the good available to one person makes it available to others and one person’s use of it does not diminish someone else’s use; and b) non-excludable, i.e., you can’t prevent people from using it, making it difficult to limit it to only paying  customers.


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The Role of Government in an Economy

8/14/2015

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By John Kessler for the Indiana Policy Review print and online editions, August 14, 2015.
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What is the proper role of government in a free market economy? No involvement? Much involvement? Some involvement? Professor John Kessler delivered these remarks to the Indiana Policy Review Eco-Development at a luncheon in Fort Wayne, Indiana on August 14, 2015. 


​U​ltimately the questions we are addressing today are about the role of government – what should the government do or not do? Economists have been thinking about this very question for a long time and have come up with basically two things that the government should do – what you could call the protective function and productive function of government.

Protective function – protect our property rights through the legitimate use of force (i.e. police and military) and enforce contracts through the legal system. When the government does this well then people will go about being economically productive because they know that they can reap what they sow. Productive function – provide certain kinds of goods that have special characteristics that make it difficult for the market to provide – these are called public goods.
Public goods have two characteristics – non-rival and non-excludable. Non-Rival – making the good available to one person makes it available to others and one person’s use of it does not diminish someone else’s use.

Non-Excludable – you can’t prevent people from using it so it is difficult to limit its use to only paying customers. Examples of public good – broadcast television (make point about finding ways to pay for it) and national defense (make point about Free Rider Problem).

It is the Free Rider Problem that makes it difficult for markets to provide public goods and why we may want to consider government production if the market can not find another way to pay for it (like we did with advertising).

Now that we know what the government should do, lets look at some of the problems government faces when they try to do things. Here it is important to point out two economic concepts – incentives matter and opportunity cost.

Incentives matter - It is important to realize that politicians and voters are people and we know that people respond to incentives.

We all, hopefully, grew up learning about the tyranny of the majority. The reason we don’t have a direct democracy in America is because our founding fathers recognized the potential harm of the tyranny of the majority. So instead we got a representative democracy.  What we did not grow up learning about is the tyranny of the minority – when small groups of people can inflict their will on the majority of people.

This is where the economics of Public Choice Theory is helpful and explains a lot about why we get the public policies that we do.  In a representative democracy like we have special interest groups have a disproportionate influence over the system. Here is why: Benefits to a few – usually the wealthy. Costs to the many – usually the poor.

When policy outcomes lead to benefits to a few and costs spread out over many then the tyranny of the minority can happen.

Let’s illustrate this by taking one example of an economic development proposal and look at it through the lens of what we’ve discussed so far. One of the favorite proposals of economic development committees is to build a stadium in the city.

I bring up this example because recently Presidential candidate and Governor of Wisconsin, Scott Walker has proposed a near $500 million subsidy to the Milwaukee Bucks to pay for a new stadium.

First, is this something that government should be involved in – is it a protective function? (NO!) Is it a public good? Is it non-rival and non-excludable? (NO!)

Second, then why do we do it? Benefits to the few – owners; Costs to the many – taxpayers. In a direct democracy if someone said we are going to vote on whether to take some of your money and give it to another person you would vote no and it wouldn’t happen. But in a representative democracy it might. What incentive do owners have to lobby in favor? What incentive do taxpayers have to lobby against?

This leads me to the other economic concept that is important to this conversation – opportunity cost.

2.  Opportunity cost – there is always an alternative use of our money and resources.
When the government, or anyone for that matter, decides to do something there is always an opportunity cost. What else might the taxpayers have done with the money? Where else might the workers have worked? What other public issue might have been better served with the money?
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It is very difficult for the government to spend money and create economic development that wouldn’t have happened somewhere else instead. The government merely shifts where the money is spent and no new economic activity is created (only a different kind). ​

Conclusion

When thinking about what kind of activities government should pursue we should limit ourselves to those things that fall into the protective function category or are clearly public goods that are non-rival and non-excludable in nature and there is no alternative for the market to provide it alone. Of course, we will be tempted to go outside of these bounds because of the incentives of the political process so we should try to focus on the opportunity cost of our decisions so that we will hopefully do the most good that we can for people with our scarce resources.

If you are going to subsidize something you should always subsidize the consumer and never the producer.  Producer will take subsidy and have no incentive to give quality product at low cost. Consumer will take subsidy and shop around for best deal and the market will force producers to give good quality at low cost.
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  • Home
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    • Brad Lindemann >
      • Lindemann-In Business For Life
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    • Curt Smith >
      • Smith - Cancer Lessons: The Ultimate Answer is Faith
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