The Hill District of Pittsburgh - Free Essay Example

The Hill District of Pittsburgh, which was a prosperous black majority city that culminated a lot of art and music and a beautiful life, went through the urban renewal of 1960 lost all its glory and became poor community and the racial segregation and profiling took its peak causing black people to feel underserving and lived to only eat and put a roof on their heads (Gottlieb, 1996). Fences, a play written by August Wilson about a black community, can be mirrored with the life of the African American community of the Hill District of Pittsburgh in many ways. In Fences August Wilson mentions that Tory is going through racial segregation at his work place, in the him and his friend Bono, both being African Americans, work as garbage collectors and the white people are assigned the job driving the garbage trucks. This is the same as the racial segregation that occurs with the white-collar jobs that the white people owned and the low-profile jobs that were being assigned to the people of the Hill District in the 1960s. Baseball is a game that has been shown to be of great importance in the Hills District of Pittsburgh in the 1950s. Grenlee Field was a black owned baseball stadium and home to the Pittsburgh Crawfords of the Negro League. It had great baseball players who were celebrated in their own time such as Josh Gibson and Satchel Paige and this was part of the great history of Pittsburgh. (Eberhardt, 2008) This same situation is depicted in the play Fences as he illustrates that Troy was a good baseball player and he played for the Negro League as well until he became old enough not to play anymore. His son Cory is also seen to be an aspiring baseball player during his time in college but unfortunately his father does not give the chance he deserved. The Hills District of Pittsburgh was well known for its great music and jazz was one of the most prosperous pieces of art the it possessed. The city produced jazz giants in its prime time like Lena Horne, Art Blakely and Errol Garner. They played at a jazz club called Crawford Grill that was owned by a black man named Gus Greenlee. Folks gathered there for a great time and appreciating music and more so socializing with one another. In Wild Avenue Days, the Hill District was known to be the most prosperous and influential black community in America. in the play Fences, there is an illustration of the existence of music played at the Crawford Grill. Lyon, Troys eldest son, aspires to be a musician and wants to make a name for himself by playing music and is seen to be determined so and is focusing on his goal and making it a reality. He keeps coming to his father to borrow money to support his career which he terms it to be a promising one and of the purposes of his life. So in this case we see that the play is depicting the Hill Districts music history and the way jazz was the pride of the people of Pittsburgh. After the assassination of Martin Luther King jr there was an uproar in America and this created racial tension and strife between the white and the black people. This also affected the people of Pittsburgh and soon afterwards there was the urban renewal age of the city in 1960. This caused the displacement of more than 8000 residents and 400 businesses in the area. Crime and poverty became the new form of life and this destroyed the greatness pf the city. In the play Fences by August Wilson it is shown that the locale had lost its glory and that the once rich people were overridden with poverty. Troy; I saw Josh Gibsons daughter yesterday. She walking around with raggedy shoes on her feet. This statement proves enough of the once great people of the area reduced to nothing and all their glory and wealth lost. Once more the play mirrors the situation in Pittsburgh perfectly and therefore it creates a picture of the people of Pittsburgh in mind. In other situations, the play Fences by August Wilson does not give an accurate depiction of the Hill District. The economic situation in the Hills District back the was thriving on the production of steel with steel mills for world war 1. This increased demand for labor among men and was the source to a better life. However, the play shows that for better life people in the area were working and earning from different sources. Troy and Bono are seen to be garbage collectors and later on Troy is promoted to be a truck driver and this for him is the true definition of having a better life. There is also the fact that the people of Pittsburgh had a radio, a weekly newspaper, a college of beauty culturists and thriving art which led to Pittsburgh being known as the little Harlem and was a mecca of art and culture. (Bodner 1900-1960 ) This is not seen in the setting where Troy and his family lived as the play was illustrated therefore its evident enough to say that the play is not a true depiction of the life of the Hill District. The play Fences gives a scenery of imprisonment in many ways such a s literal ones and symbolic ones. It is seen that the main character, Troy, is jailed once in his lifetime for 15years due to robbery, assault and a murder he wasnt sure he committed. This shapes the characters behavior and molds him into the person he would become when he grew up. During his time in prison he developed two characters that shaped his life. One was that he grew to be a good baseball player and he aspired a career because of that and continued to play even after prison but his career was cut short because of racial profiling and his age causing him to hate baseball. The second one was a shortcoming which he learnt during his time in penitentiary and that was to push people away from and not have real emotions and attachments to people. He does not love his wife and mistreats his son and everyone around him all because of the detachment he has felt during his time in prison. This behavior is also contributed by the way his father mistreated him while growing up. The characteristic behavior shown by the main character due to his time in prison can be attributed to people who have gone through slavery. Slavery and imprisonment can be the identical and different at the same time in that convicts have a form of liberty and this is seen with Troy who becomes a good baseball player all while he is in prison and this couldnt have been possible if he was in enslavement. Slaves had owners and their every move was measured and watched making liberty a forgotten tale to them. There is also the part of emotional detachment of the victims of slavery and imprisonment. This is seen to be of a greater similarity as the people are going through a time where freedom is much less of a subject and forming attachments might lead to heartbreaks and losses they are not ready for. This might explain the irrational behavior of Troys father towards his women and children because he might have been a slave who has seen nothing but cruelty his whole life. Troy was taken as a prisoner because of robbery and breaking the law and in a way it can be said that he deserved it but that cant be said with slaves since they did no wrong and being enslaved is against their will and is unjust since they have no freedom until they are bought by another master but thats not the case seen with prisoners as they serve their time and gain their freedom once the given time lapses. References. Bodnar, J. E., Simon, R., Weber, M. P. (1983). Lives of their own: Blacks, Italians, and Poles in Pittsburgh, 1900-1960 (Vol. 286). University of Illinois Press. Eberhardt, M. (2008). The low-back merger in the steel city: African American English in Pittsburgh. American speech, 83(3), 284-311. Gottlieb, P. (1996). Making Their Own Way: Southern Blacks Migration to Pittsburgh, 1916-30 (Vol. 82). University of Illinois Press.

Fiscal Dominance and Monetary Dominance and Policy Instruments Used by the Bank of England for Inflation Targeting - Free Essay Example

Fiscal Dominance and Monetary Dominance and Policy Instruments Used by the Bank of England for Inflation Targeting 1. Introduction. The government often employs fiscal policy, monetary policy or a combination of both to sway the economy back to an equilibrium position. The manner in which the government employs both policies may result to either fiscal or monetary dominance. This paper is aimed at defining fiscal and monetary dominance so as to employ the distinction between the two policies to determine whether the Bank of England has enough policy instruments to control inflation. To achieve this objective, the IS/LM model will be employed to see how various policy measures affect the interest rate, national income and inflation rates[1]. We begin by defining fiscal policy, monetary policy, fiscal dominance and monetary dominance in section 2 below. The study later provides a description of the IS/LM model in section 3 and finally, an evaluation of the instruments used by the bank of England in controlling inflation is done in section 4. 2. Fiscal Policy, Monetary Policy, Fiscal Dominance and Monetary Dominance 2.1. Fiscal Policy Fiscal policy refers to a situation whereby the government restores equilibrium in the economy by making changes to taxes or government expenditure on public goods and services[2]. When there is under-utilisation of capacity, the government can increase capacity utilisation by reducing taxes (that is through a reduction in tax rates or tax base) or by increasing spending on public goods and services as well as subsidising the production of certain goods and services[3]. Fiscal policy aimed at increasing money supply is referred to as easy fiscal policy[4]. On the other hand, when there is over-utilisation of capacity, the government either increases taxes (through and increase in tax rates or tax bases) or reduces spending on public goods and services[5]. It also reduces subsidies and transfer payments. This type of fiscal policy is referred to as tight fiscal policy[6]. 2.2 Monetary Policy Monetary policy is referred to as a means by which the central bank tries to sway the economy to equilibrium by influencing the supply of money[7]. This is achieved through four main approaches, which include: printing more money; direct controls over money held by the money sector; open market operations and influencing the interest rate. Both tight and easy monetary policies can also be identified. Like easy fiscal policy, easy monetary policy is one whereby the central bank embarks on a policy to increase the supply of money. On the other hand tight monetary policy is a policy whereby the central bank embarks on a policy to limit the circulation of money such as increasing interest rates. 2.3 Fiscal Dominance Fiscal dominance occurs when government can determine the stock of debt, and the path of total expenditures and taxation[8]. Under these conditions, the government can influence the inflation rate, the future flow of monetary base by raising the permanent level of expenditures without at the same time raising taxes[9]. Fiscal dominance is therefore a scenario whereby monetary policy is driven by fiscal policy[10]. 2.4 Monetary Dominance Monetary dominance refers to a situation whereby fiscal policy is influenced by monetary policy[11]. Liviatan[12] states, that: the benchmark definition of monetary dominance is that the fiscal policy has to accommodate any monetary policy. This implies that fiscal policy must ensure that the liquidity of the government is maintained for any monetary policy[13]. 3. The IS/LM Model The IS/LM model is made up of two curves, the IS curve and the LM curve[14]. The IS curve, which represents the equilibrium conditions of the real (investment-savings equilibrium) side of the economy[15]. For an open economy, the IS curve can be represented by the following equation[16]: (1) Where Y= national income, Z= private expenditure (consumption and investment), i = interest rate, T= taxes, G= government spending, Ex = exports (receipts on the current account of balance of payments), e= exchange rate, Im = imports (payments on the current account of balance of payments). The LM curve is influenced by balance of payments, because differences in imports and exports affect the money supply: Md = Ms Md = Md(Y,i) Ms = m.C Where Md = money demand, Ms = money supply, M = money multiplier, C = volume of base money. The central bank creates base money by granting domestic credit as well as through open market operations such as the purchase of foreign exchange. Following from Visser[17], the base money supply at any point in time should be equal to the base money supply one period behind plus the change in the domestic credit supply D during that period and the change in the foreign-exchange reserves V. This change is equal to the balance-of-payments balance X of the non-financial sector[18]. C = C-1 + D + V V = X The central bank uses open-market operations through the sales and purchase of domestic debt instruments such as bonds and other debt issues as the instrument of monetary policy. The volume of this purchase can be denoted by H = D. Following from above C = C-1 + X+H Ms = m(C-1 +X+H) This gives us the equation for the LM curve as follows[19]: Md (Y, i) = m(C-1+ X+ H)(2) Equating the real side of the economy (equation (1)) to the monetary side (equation (2)) leads to the IS/LM model. Figure 1. Fiscal Policy a). Easy fiscal policy b). Tight fiscal policy At equilibrium, the equation for the IS curve is equal to that for the LM curve, that is the real side of the economy is equal to the monetary side of the economy and it is at this point that the LM curve cuts the IS curve[20]. It should be noted that the IS curve has a negative slope, while the LM curve has a positive slope. Figure 1 above represents the initial equilibrium position of the IS/LM model. The equilibrium national income is given by Y1; the equilibrium interest rate is i1. Lets assume that the government embarks on an easy fiscal policy and reduces taxes T, this will result in a shift in the IS curve to the right from IS to IS, establishing a new equilibrium point between the IS curve and the LM curve at a higher level of national income Y2 and at a higher rate of interest i2. This is shown in the figure 1a above. Conversely if the government decides to embark on a tight fiscal policy by say increasing tax rates or the tax base so as to increase the overall tax liabilit y, this will lead to a decrease in the national income from Y1 to Y2 and as well as a decrease in the interest rate from i1 to i2, resulting in a leftward shift in the IS curve from IS to IS. This establishes a new equilibrium position to the left. This effect is shown in figure 1b above. Figure 2 Monetary Policy. a). Easy monetary policy b). Tight monetary policy In the IS/LM model above, the intersection of LM and IS represent the equilibrium state of the economy. At this point, the national income is given by Y1, and the interest rate by i1. In the first case lets assume that the central bank embarks on an easy monetary policy by purchasing debt securities in the open market. This will lead to an increase in the supply of money and thus the national income. The LM curve will shift to the right creating a new equilibrium position at a higher national income Y2 and a lower interest rate i2. This is represented in figure 2a above. On the other hand, if instead the central bank decides to embark on a tight monetary policy by raising interest rates from i1 to i2, it will result to a decrease in the national income from Y1 to Y2 and a shift in the LM curve from LM to LM. This is represented in figure 2b above. 4. Bank of England and Inflation Targeting The main instrument employed by the bank of England in fighting inflation is the interest rate. For example, the bank has raised interests rates 5 times since the beginning of the year 2007[21]. The last increase in interest rates was on 5th July 2007, which saw an increase in the interest rate from 5.5% to 5.75%[22]. Inflation in the UK is currently running at 2.5% and the bank of England is targeting 2% in the course of the year[23]. The bank is also worried that mortgage costs were also part of the official inflation target because they represent the biggest expenses for many households but despite this, mortgage costs are not included in the consumer price index (CPI). According to Clarke[24] from the BBC World Service, the Governor of the bank Mervyn King explained that the omission of mortgage costs from the CPI is controversial making it difficult for the bank to meet its objective of reducing inflation to its target level. From the foregoing, one can conclude that the Bank of Englands main policy instrument is the interest rate. It rarely employs policies such as open-market operations and direct control over the money held by the non-financial sector. It therefore has limited instruments in targeting inflation. This is also an indication of monetary dominance whereby any fiscal policy must accommodate any monetary policy, which in this case is an influence on the interest rate. BIBLIOGRAPHY Black J. (2002). Easy fiscal policy.A Dictionary of Economics.. Oxford University Press, 2002. Oxford Reference Online. Blackden R. (2007). Bank of England set to raise interest rates. Telegraph.co.uk. 1:48am BST05/07/2007. Retrieved from: https://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/04/bcnrates104.xml Clarke J. (2007). The Governor of the Bank of England, Mervyn King, has told the BBC he wishes mortgage costs were part of the official inflation target. BBC Radio 4s Money Box. Retrieved from: https://news.bbc.co.uk/1/hi/programmes/inside_money/6906592.stm Fratianni M., Spinelli F. (2001). Fiscal Dominance and Money Growth in Italy: The Long Record. Explorations in Economic History, vol. 38, pp 252-272. Kennedy S. (2007). Bank of England raises key rate to 5.75% U.K. rates hit six-year high; further hike may be in the cards. Marketwatch.com news 10:06 AM ET Jul 5 2007. Retrieved from: https://www.marketwatch.com/news/story/bank-england-raises-interest-rate/story.aspx?guid=%7B3ABCFDB3-7E73-407C-B45D-D589DC65EC67%7D Liviatan N. (2003). Fiscal Dominance and Monetary Dominance in the Israeli Monetary Experience. Bank of Israel Research Department Discussion Paper No. 2003.17 Sabat M., Gadea M. D., Escario R. (2006) Does fiscal policy influence monetary policy? The case of Spain, 18741935. Explorations in Economic History, vol. 43, pp, 309331 Smullen J., Hand N. (2005). Monetary Policy. A Dictionary of Finance and Banking. Oxford University Press. Oxford Reference Online. Visser, H. (2004). A Guide to International Monetary Economics : Exchange Rate Theories, Systems and Policies 3rd Ed. Cheltenham, UK, Northhampton, MA Edward Elgar Publishing, Inc. 1 Footnotes [1] Visser (2004: p. 40). [2] Smullen and Hand (2005) [3] Smullen and Hand (2005); Visser (2004: p. 43) [4] Smullen and Hand (2005) [5] Black (2002) [6] Ibid. [7] Ibid [8] Frantiani and Spinelli (2001: p. 255). [9] Ibid [10] Sabate et al. (2006: p. 319) [11] Liviatan (2003: p. 1) [12] Ibid [13] Ibid [14] Visser (2004: p. 40). [15] Ibid (p. 41) [16] Ibid (p. 41) [17] Visser (2004: p. 42) [18] Ibid (p. 42) [19] Ibid (p. 42) [20] Visser (2004: p. 42) [21] Kennedy (2007); Blackden (2007). [22] Ibid [23] Ibid [24] Clarke (2007)