Global Financial Crisis Essay Example | Topics and Well Written Essays - 1500 words

Global Financial Crisis - Essay Example Investments Banks in United States received a huge blow of the financial crisis for which they gradually disappeared from the financial scenario of the country (Kenc & Dibooglu, 2010, p. 3). The crisis of the mortgage market during 2007 rendered a huge impact on countering a decline in the value of the market price of large securities and other financial instruments held by the financial organizations of the world. Credit Crunch which happened in the American markets created a global turmoil by declining the value of debt instruments all over the world by restricting credit both on personalized and on organized levels. Thus the contagious effect of the financial credit crunch of America took the form of global financial crisis by ripping off the stability of the financial institutions on an international scale (Longstaff, 2010, p.436; Aronson, 2010, p. 276). Reasons for the Global Financial Crisis The main reason which is attributed to causing the event of global financial crisis in the global scenario is the effect of contagion. Contagion effect has been identified to generate similar shocks of financial breakdown in one economic system to other financial systems operating throughout the world mainly through three ways. In the first manner the potency of economic breakdown in one financial market is spread to other world economies through the information network. This information obtained can hugely affect the working of the economic system of the other countries largely jeopardizing them. Secondly the event of contagion also gains ground by disturbing the liquidity position of the financial assets of the other global economies. A strike imposed on the availability of financial liquidity through the system of credit in one economy also renders potential impact by curbing the amount of liquidity in other economies of the world. In the third case the contagious effect of the financial crisis in any developed region like America also weakens the desire and potenc y of other economies to enhance the risk portfolio in their financial system (Longstaff, 2010, p.438). Along with the above reasons there were several other causes like the selfish outlook of the micro factors of the financial system like the groups of investors, creditors, banks and other financial institutions. These economic groups were busy considering avenues to get the best of the financial system by drifting the financial and economic policies of the government in their favor. The impacts rendered by these systems led to the growth of credit generation in the economy of United States until it led to the final demise. Further the social policy outlines taken by the government of United States to help render huge credits to the poor people of the country to construct houses also led to the happening of the credit crunch. Huge amount of credit ushered in the economy with low amount of interest also led the banks to gain the advantage of such. The financial system of granting cre dit in America was managed by different agencies that used to set policies and regulations detrimental to the economic system of the country. These agencies were themselves not successful in rightly satisfying the responsibilities entrusted on them and mainly wanted to avail the favor of the intricacies of the government regulations pertaining to credit (Wignall & Atkinson, 2009, pp. 2, 5, 8; McNally, 2009, p. 36, 38). The opening up of the economic s

Capm And Fama French Three Factor Model Finance Essay

Capm And Fama French Three Factor Model Finance Essay Shortly after the ground-breaking work of Markowitz on modern portfolio theory (1952) a new branch in Finance developed trying to explain the expected return on any financial asset. Soon the model with probably largest impact on the financial industry was born, the Capital Asset Pricing Model. Even after many different studies questioning the validity of the model, it is still the most used by practitioners. A lot of other models were subsequently developed on the same reasoning. Fama French Three-Factor Model is considered one of the most promising and consistent. We start this paper briefly explaining the CAPM and its shortcomings. On those grounds, we explain the Fama French model. Then, we test both models in US data from 1967 till now. Different portfolios were used, testing for the impact of size, book-to-market ratios, and the specific industry. We end up drawing conclusions on the results found. CAPM The Capital Asset Pricing Model (henceforth CAPM) has a very curious history, being built independently by Jack Treynor (1965), William Sharpe (1964), John Lintner (1965) and Jan Mossin (1966), all in the same time span of the early sixties. This work was based on the earlier revolutionary theory of Markowitz and also on Tobins Separation Theorem. The CAPM has several strong assumptions inherited from the said projects of mean variance efficiency that essentially create a perfect market environment. Investors are rational and risk averse, can borrow and lend unlimited amounts at the risk-free rate and have homogenous expectations and information about all assets returns. There are no taxes, inflation, transaction costs, no short selling restrictions and all assets are infinitely divisible and perfectly liquid. The assumptions constrain the setting for the CAPM world. They set a stage that only non-diversifiable risks are rewarded with extra returns, and since each additional asset introduced into a portfolio further diversifies the portfolio, the optimal portfolio must comprise every asset with each asset value-weighted. All such optimal portfolios comprise the efficient frontier. This makes the expected return of any asset or portfolio to vary linearly with the returns of the market portfolio, according to the following formula: Beta is the key measure as it gives the sensitivity of the excess returns of an asset or portfolio compared to the excess returns of the market portfolio. Since the unsystematic risk is diversifiable, the risk of a portfolio can be viewed as beta. The CAPM is best described by Sharpe (1988) as a simple, yet powerful description of the relationship between risk and return in an efficient market. This is a very intuitive thought process. The level of returns one expects to get is directly related to the exposure to market volatility. Stock specific error is diversified away when choosing the efficient portfolio, and as such the only source of return comes from choosing the relation your portfolio has with the market. The CAPM is so important that the standard deviation of a stock return no longer was the normally used risk measure, but rather its relation to the market returns. It is also the number one tool to find discount rates for company valuation and for portfolio management. However it has not been free of criticism. CAPM criticism After it was proposed, empirical tests were executed normally running the following regression: Where a proxy of excess market returns is used and regressed against a certain asset return. The Alpha of the regression indicates the excess return (either positive or negative) that is not explained by the CAPM. According to CAPM, as the correlation with market should completely explain its return, the apha of the previous regression should be 0. First of all, the use of a market proxy leads to Richard Rolls critique (1976). It is quite simple but revealing and it simply states the CAPM can never be tested as the exact composition of the market portfolio is not known. All proxies used might be mean variance efficient but the market might not, leading to all tests being inherently biased. Besides, the interpretation of Beta using market proxies leads to relative measures of risk, as the Beta obtained depends on the market proxy used. Besides Rolls opinion on the theory, a number of anomalies were found on the model. Characteristics such as size, earnings/price, Cash flow/price, book-to-market-equity, past sales growth had effects on average returns of stocks. These are called anomalies as they are not explained by CAPM, leading to the idea that risk is multidimensional and as such the CAPM is fundamentally wrong in its core conclusion. Eugene Fama and Kenneth French (1996) made the greatest stride, when stating that anomaly variables include a risk premium contained in the characteristics of these variables. These anomalies are mainly divided by two main factors. Size, which they explain theoretically, and relative distress, passing through the E/P and book to market as measures. Fama French Three-Factor Model Eugene Fama and Kenneth French since expanded the CAPM to the Fama-French (FF) tri-factor model (1992), which adds two variables to capture the cross-sectional variation in average stock returns associated with market: Beta, size, leverage, book to market and earnings-price ratio. This creates the following model: , which can be transformed into Where the factors added to the CAPM are the SMB (Small minus Big), a measure of the historic excess return of small caps over big caps, and HML (High minus Low), the same difference for returns of value stocks over growth stocks. This model is not as widely used as the CAPM, but we will test empirically if it performs better than the original one-factor model. Methodology After introducing the theoretical bases of these models, we will explain the methodology we used on our tests. We used data from Kenneth French ´s website, consisting of market excess returns from NYSE, AMEX, and NASDAQ firms and the values of returns from all those companies divided into size and book to market quintiles and also divided into five sections of industries Consumer Goods, Manufacturing (energy and utilities), High-tech, Healthcare and Service industry. The data is monthly from 1967 to 2010. Our variables of interest comprise the alphas of each regression (i.e., returns unexplained by the model) and the adjusted, which adjusts for the number of explanatory terms in a model unlike the regular, the adjusted increases only if new variables improve the model. We used all this data to run the normal empirical test regression expressed in (2). We will ignore Rolls critique in the tests and use a certain market proxy as in our opinion data on returns of a certain index representative of the country where investors negotiate is quite representative of market returns, as that data is amply divulged and influences all assets related. Results These are the results in regression form and the values of the alphas obtained with double standard error bands: Table 1 Regression Results from Size Portfolios (Values in parenthesis refer to the t-stat of the variable above) Looking at the alpha values of the regressions under the CAPM, the 4th quintile is the only one significant on a 95% confidence interval. All the beta values are significant and different than zero. Alpha values decrease as we go from portfolios of smaller to bigger companies, as does the of the regressions. As for the Fama French model, the values of factors are significant in all the size regressions, and the alpha value is only significant in the 5th quintile of biggest companies. The follows a similar behavior. These results seem to favour the tri-factor approach, as including the SMB variable seems to improve the quality of fit of smaller companies. The difference in the adjusted of the lowest 20% quintile between the CAPM and Fama French models is a whopping 30%, indicating that some unsystematic risks, captured by the difference between big and small firms, affect returns. In other words, these results favor Fama and French ´s model in explaining returns over the CAPM. Chart 1 Plot of CAPM alpha with double standard error band Chart 2 Plot of FF alpha with double standard error band These charts tell a more interesting story. The alpha values of the CAPM diminish a lot when going from small cap quintiles to large cap ones, from relatively high alphas to close to zero. Everything changes when using FF three-factor model where the alpha values are negative for small caps and go to positive when moving to bigger companies. The larger range of alphas in the CAPM over FF, especially in smaller companies, again indicates that returns are not fully captured by measuring only correlation with the market. Accordingly, by adding SMB this range is considerably reduced, especially in the portfolios based on the lowest 20% companies in size. Table 2 Regression Results from Book-to-Market Portfolios (Values in parenthesis refer to the t-stat of the variable above) Here the Betas of all regressions are significant. The fourth and fifth quintiles on the CAPM present a high alpha rejecting the null hypothesis that they are not significant, with a 95% confidence level. On the other hand, the FF model rejects only the lowest 20% B/M portfolios, and by the tiniest of margins. These results show evidence that Fama and French were indeed correct by considering the HML factor in their regression. In fact, the existence of significant alphas in the two highest quintiles in the CAPM, combined with the substantial differences in the adjusted 13% for the 4th quintile, almost 20% in the 5th again demonstrate that CAPM is not considering important variables in determining returns. Chart 3 Plot of CAPM alpha with double standard error band Chart 4 Plot of FF alpha with double standard error band As the B/M values increase, CAPMs results are ever worse regarding alpha. By adding double standard error bands, CAPMs portfolios based on the highest 20% value have alphas ranging from 0.1 and 0.6, very substantial values. FF performs much better, with alphas not moving far away from 0. Table 3 Regression Results from Industry Portfolios (Values in parenthesis refer to the t-stat of the variable above) Chart 5 Plot of CAPM alpha with double standard error band Chart 6 Plot of FF alpha with double standard error band Contrary to the previous analysis, the three-factor model only displays marginal improvements in the adjusted to the single-factor model when dealing with industry-based portfolios. In fact, the FF model has significant alphas in two different industries Health Care and Others while the CAPM has none. Moreover, the SMB variable seems to be irrelevant in the Consumer Goods and in other industries. We should not be surprised by these results, as the FF model was built around two ideas: small companies and those with high B/M ratios were undervalued by the market. Thus, when analyzing portfolios based on different restraints (like industry) the model will not perform much better compared to the CAPM. A note on Fama-French Three-Factor Model The FF model is an extension of the CAPM model in the sense that it uses two extra factors: SMB and HML. The first one increases the modulation of different size portfolios. The second one addresses the difference in book values of companies included in different portfolios. We suspect that SMB is in fact important whenever we are trying to predict the different performance of portfolios split using size as the criteria. The same reasoning can be used to portfolios split using book-to-market ratio as the criteria. We decided to apply this idea to the data, computing the average contribution of each factor to the total excess return of each portfolio. The resulting table is presented below. Table 4 Factor Contribution to Excess Return We can see that, as we suspected, SMB is in fact very relevant (19% on average) to explain the excess return of different portfolios split with market size criteria. That is even more critical when we are considering portfolios of smaller stocks. In those portfolios, the factor HML is not particularly important. When we move to book-to-market value different portfolios, it is HML that contributes significantly (14%), especially to high book-to-value stocks, and SMB can be neglected. Finally, when the criterion to split portfolios is neither size nor book-to-market, the two extra factors of the Fama-French model have no explanatory power on average. We can see the average weights are very close to standard CAPM. We can speculate on the difference across industries: for instance, hi-tech and health care stocks tend to have higher book-to-market ratios, and so the HML factor is relevant. It is possible that a factor like high dividend yield less low dividend yield might be robust to explain performance differences among portfolios split according to dividend yield level. We are not questioning the applicability of the Fama-French model. What we are addressing here is that each factor does not have a generalized relevant contribution to explain excess returns. In certain situations, like small cap portfolios and growth stocks, each factor in turn becomes very important. Outside of these native environments, the factors do not contribute to explain or predict excess returns. Final Remarks Throughout this work we have shown that Fama and Frenchs tri-factor model is superior to the CAPM in capturing some non-systematic anomalies not considered by the simple one-factor approach. These anomalies include the undervaluation of small firms and those with high B/M ratios. Adding variables that reflect this effect considerably improves the quality of fit of the model and eliminates loose ends as reflected by the significant alphas present in some portfolios using the CAPM. However, we must pay close attention to data, as performing a FF regression on data that does not reflect these variables, as industry does not improve the models. References and Other Bibliography Fama, E. F., French, K. R. (1992). The Cross-Section of Expected Stock Returns. The Journal of Finance, 47(2), 427-465. Fama, E. F., MacBeth, J. D. (1973). Risk, Return, and Equilibrium: Empirical Tests. The Journal of Political Economy, 81(3), 607-636. Lintner, J. (1965). The Valuation of Risk Assets and the Selection of Risky Investments in Stock Portfolios and Capital Budgets. The Review of Economics and Statistics, 47(1), 13-37. Markowitz, H. (1952). Portfolio Selection. The Journal of Finance, 7(1), 77-91. Mossin, J. (1966). Equilibrium in a Capital Asset Market. Econometrica, 34(4), 768-783. Roll, R. (1977). A critique of the asset pricing theorys tests Part I: On past and potential testability of the theory. Journal of Financial Economics, 4(2), 129-176. Sharpe, W. F. (1964). Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. The Journal of Finance, 19(3), 425-442. Treynor, Jack L. (1965). How to Rate Management of Investment Funds. Harvard Business Review, 43(1), 63-75.

A Good Man Is Hard To Find :: essays research papers fc

Views and Characters Flannery O’Connor wrote the short story, "A Good Man is Hard to Find" in the hopes of portraying to the reader the racist views of the time: many of the ideals possess "a kind of holy madness or beauty." (Kirszner 238). These are the words mentioned in Literature, and express the emotions that O’Connor made the grandmother experience in the story. The story takes on a sort of irony throughout to provide a comedic look at old values and traditions, displaying to the reader how we advance over time. The grandmother very ignorantly describes just how separate dark and light colored people were during the period: "Oh look at the cute little pickaninny!" she said and pointed to a Negro child standing in the door of a shack. "Wouldn’t that make a picture, now?" she asked and they all turned and looked at the little Negro out of the back window. He waved. "He didn’t have any britches on," June Star said. "He probably didn’t have any," the grandmother explained. "Little niggers in the country don’t have things like we do." The language that is shown in this section of the story clearly demonstrates the difference between what is acceptable, and what is racist. O’Connor clearly provides us that she never has the intent to be racist herself, but rather her characters, possibly an influence in her life, are to blame. The grandmother shows her politeness to June, but also shows her rudeness by describing the dark colored boy with such racist terms, providing the reader with a sense of the "holy madness" that resides within her. The story contains eleven characters, of which only one illustrates her lack of coming together and recognizing everyone as a whole, rather than as separate races. Despite the obvious difference in language barriers, the grandmother does reflect a soft side: "Two fellers come in here last week," Red Sammy said, "driving a Chrysler. It was a old beat-up car but it was a good one and these boys looked all right to me. Said they worked at the mill and you know I let them fellers charge the gas they bought? Now why did I do that?" "Because you’re a good man!" the grandmother said at once. Of notable importance, the name Sam means to listen, or to hear, supporting the fact of racial differences. (Babycenter) This could be the explanation why the characters, Sam and the grandmother, have the most polite conversation in the entire short story.

Emergence of Communicative Language Teaching

Discuss the three terms â€Å"Approach†, â€Å"Method† and â€Å"Technique† and describe one Approach which provides the basis for a Method and subsequently some Techniques under that particular Method. APPROACH Theories about the nature of language and language learning Theory of language Structural Functional Interactional METHOD Objectives Organization of Content Syllabus Design Roles 1. Learner2. Teacher3. Materials Types of Interaction Types of activitiesContent Based TECHNIQUEImplementation of the design Classroom Practice Activities behavior's In English language teaching process, there are terms that teachers need to know. They are approach, method, and technique. About four decades ago (1963) Edward M. Anthony gave us a definition that has admirably withstood the test of time. According to Edward M. Anthony an approach is a set of correlative assumptions dealing with the nature of the language and the nature of language teaching and learning. In other w ords the word ‘approach’ in ELT refers to different theories about the nature of language and how languages are learned.Let us move on to our second definition – of method. Method is an overall plan for systematic presentation of language based on selected approach. It consists of a number of techniques, arranged in an order. When we talk about techniques we mean specific activities which take place in a classroom. Using flash cards in the classroom is a technique. Techniques must be consistent with a method, and therefore in harmony with an approach too. According to Longman Dictionary of Applied Linguistics, Approach refers to different theories about the nature of the language and how languages are learned.Method refers to a way of teaching a language based on systematic principles. It is an application of views on how language is taught and learned. Technique refers to what takes place in the classroom. The forthcoming analysis focuses on the behaviourist app roach, the audio lingual method and different drilling techniques. The Audio-Lingual Method The Audio-lingual method is a style of teaching used in teaching foreign languages. It is based on behaviorist theory. Behaviourist theory professes that certain traits of living things could be trained through a system of reinforcement.The Audio-lingual method was widely used in the United States and other countries in the 1950’s and 1960’s. The theory underlying Audio-lingual method is that ‘language is primarily speech’. If listening and speaking skills were developed, they would form the foundation for developing reading and writing skills. As learning a language is acquiring a certain set of habits, this method recommends that the teachers of English should take up pronunciation practice, pattern drills and conversation practice in their classroom regularly.Another principle that has become the basis for this method is that all of us have learnt our languages b y listening to the language spoken by others and speaking it starting with monosyllabic disyllabic sounds. According to ELT experts a second language can be learnt in this way. The Audio-lingual method is a method that deals with a behaviorist theory that uses stimulus, response, and reinforcement. STIMULUSRESPONSEREINFORCEMENT Here are some psychological foundations of the Audio-lingual method. Foreign language learning is basically a process of mechanical habit formation.Good habits are formed by giving correct responses rather than by mistakes. By memorizing dialogues and performing pattern drills the chances of producing mistakes are minimized. Language is verbal behaviour. Language skills are learned more effectively if they are presented orally first, then in written or printed form. An analogy provides a better foundation for language learning than analysis. Analogy involves the process of generalization and discrimination. Explanation of how language functions under certain rules is not given by the teacher.Students should practice a pattern in different contexts and arrive at the analogy between the first and the second language. The teaching of grammar is best done inductively rather than deductively. The meanings that the words of a language have for the native speaker can be learnt only in a linguistic and cultural context and not in isolation. Teaching a language thus involves teaching aspects of the cultural system of that people who speak the language. Dialogues and drills form the basis of Audio-lingual classroom practices.The use of drills and pattern practice is a distinctive feature of the Audio-lingual method. Various kinds of drills are used. Types of Oral Drills Repetition: where the student repeats an utterance as soon as he hears it Teacher: This is the seventh month. Student: This is the seventh month Inflection: Where one word in a sentence appears in another form when repeated Teacher: I ate the sandwich. Student: I ate the sandwiche s. Replacement: Where one word is replaced by another Teacher: He bought the car for half-price. Student: He bought it for half-price. Restatement: The student re-phrases an utteranceTeacher: Tell me not to smoke so often. Student: Don't smoke so often! Completion: where the student repeats the utterance in completed form. Techer: I’ll go my way and you go. Student: I’ll go my way and you go yours. Instruction materials in the Audio-lingual method assist the teacher to develop language mastery in the learner. †¢Tape recorders †¢Audiovisual equipments †¢Language laboratory In the late 1950s, the theoretical underpinnings of the method were questioned by linguists such as Noam Chomsky, who pointed out the limitations of structural linguistics.Despite being discredited as an effective teaching methodology in 1970, audio-lingualism continues to be used today. REFERENCES ?Richard. C. Jack and Rodgers. S. Theodore. 2003. Approaches and Methods in Language Teac hing . The Press Syndicate of the University of Cambridge. ?Rao Venugopal, K. 2002. Methods of Teaching English. Neelkamal Publications. pvt. ltd ? Allen, B. Teaching English as a Second Language. 1965. ?http//www. mindmeister. com ?http://en. Wikipedia. Org/wiki/audio-lingual-method

Long-Tеrm Plan for Black Amеrica

ThÐ µ Ð µconomic nationalism of BookÐ µr T. Washington, which rÐ µliÐ µd on businÐ µss ownÐ µrship to providÐ µ thÐ µ mÐ µans for group advancÐ µmÐ µnt, rÐ µprÐ µsÐ µnts thÐ µ classic capitalistic approach to Ð µconomic dÐ µvÐ µlopmÐ µnt. Throughout thÐ µ twÐ µntiÐ µth cÐ µntury, thÐ µrÐ µ havÐ µ bÐ µÃ µn a numbÐ µr of approachÐ µs suggÐ µstÐ µd for improving thÐ µ Ð µconomic viability of African-AmÐ µrican communitiÐ µs in thÐ µ UnitÐ µd StatÐ µs.GivÐ µn thÐ µ Ð µconomic discrimination and opprÐ µssion by institutions in thÐ µ largÐ µr sociÐ µty, many social thÐ µorists and urban Ð µconomists havÐ µ arguÐ µd that African-AmÐ µricans should usÐ µ thÐ µir sÐ µgrÐ µgatÐ µd social circumstancÐ µs to build a sÐ µparatÐ µ and autonomous Ð µconomic basÐ µ within thÐ µir own communitiÐ µs.ThÐ µ sharÐ µd Ð µxpÐ µriÐ µncÐ µ of social sÐ µgrÐ µgation, Ð µmploymÐ µnt discrimination, and minority status would providÐ µ th Ð µ rationalÐ µ for thÐ µ dÐ µvÐ µlopmÐ µnt of coopÐ µrativÐ µ Ð µntÐ µrprisÐ µs that would advancÐ µ thÐ µ Ð µconomic conditions of thÐ µ Ð µntirÐ µ black community.BusinÐ µss ownÐ µrship is sÐ µÃ µn as thÐ µ Ð µconomic Ð µnginÐ µ for thÐ µ community dÐ µvÐ µlopmÐ µnt procÐ µss. Еconomic dÐ µvÐ µlopmÐ µnt through thÐ µ promotion of Ð µntrÐ µprÐ µnÐ µurship Ð µxalts individualistic Ð µfforts and prÐ µdicts thÐ µ Ð µvÐ µntual â€Å"tricklÐ µ down† of bÐ µnÐ µfits from thÐ µ capitalists to thÐ µ workÐ µrs.Washington assumÐ µd that sincÐ µ Ð µntrÐ µprÐ µnÐ µurship has workÐ µd succÐ µssfully for many othÐ µr AmÐ µricans by bringing Ð µconomic and social advancÐ µmÐ µnt, it should do thÐ µ samÐ µ for African-AmÐ µricans.ЕntrÐ µprÐ µnÐ µurship is assumÐ µd to havÐ µ immÐ µnsÐ µ powÐ µrs. Еconomist Sol Ahiarah, a lattÐ µr-day proponÐ µnt of Washington's Ð µconomic philosophy, arguÐ µd that â⠂¬Å"by owning [businÐ µssÐ µs] and . . . controlling thÐ µir mÐ µans of livÐ µlihood blacks can solvÐ µ most of thÐ µir own problÐ µms and Ð µvÐ µn bÐ µ immunizÐ µd against racism† [Ahiarah 1993, 18].BusinÐ µss ownÐ µrship was promotÐ µd as thÐ µ mÐ µans for community rÐ µvitalization. For mÐ µ as for young black man thÐ µ plan has bÐ µÃ µn an attractivÐ µ onÐ µ bÐ µcausÐ µ it corrÐ µsponds with thÐ µ prÐ µvailing capitalistic Ð µthos in AmÐ µrican sociÐ µty. Many policymakÐ µrs havÐ µ bÐ µÃ µn so pÐ µrsistÐ µnt in thÐ µir rÐ µliancÐ µ on Ð µntrÐ µprÐ µnÐ µurship that altÐ µrnativÐ µ approachÐ µs wÐ µrÐ µ rarÐ µly considÐ µrÐ µd.Washington's Ð µconomic dÐ µvÐ µlopmÐ µnt proposals wÐ µrÐ µ a rÐ µsponsÐ µ to thÐ µ lÐ µgal sÐ µgrÐ µgation of that Ð µra. HÐ µ promotÐ µd appÐ µasÐ µmÐ µnt and political accommodation-thÐ µsÐ µ wÐ µrÐ µ thÐ µ hallmarks of his idÐ µological position. His ovÐ µrall objÐ µcti vÐ µ was sÐ µlf-sufficiÐ µncy, and hÐ µ was considÐ µrÐ µd thÐ µ lÐ µading advocatÐ µ of Ð µconomic nationalism in thÐ µ black community [ButlÐ µr 1985, 65].To Washington, thÐ µ dÐ µvÐ µlopmÐ µnt of black Ð µntrÐ µprÐ µnÐ µurship within thÐ µ confinÐ µs of thÐ µ sÐ µgrÐ µgatÐ µd black community was thÐ µ most viablÐ µ routÐ µ to Ð µconomic stability and Ð µquality. ThÐ µ Ð µconomic dÐ µvÐ µlopmÐ µnt of thÐ µ black community would bÐ µ proof to thÐ µ dominant whitÐ µ sociÐ µty that African-AmÐ µricans wÐ µrÐ µ Ð µqual [Blair 1977, 10].ThÐ µ Washington approach and thÐ µ Mondragon sharÐ µ only two common charactÐ µristics. First, both wÐ µrÐ µ dÐ µsignÐ µd to sÐ µrvÐ µ an Ð µthnically opprÐ µssÐ µd pÐ µoplÐ µ. SÐ µcond, Ð µach is toutÐ µd as a mÐ µans for achiÐ µving group advancÐ µmÐ µnt. UnlikÐ µ thÐ µ Mondragon, which makÐ µs social dÐ µvÐ µlopmÐ µnt Ð µssÐ µntial to Ð µconomic dÐ µvÐ µlopmÐ µnt, Washing ton's Ð µntrÐ µprÐ µnÐ µurial focus was only implicitly tiÐ µd to broadÐ µr social concÐ µrns such as group advancÐ µmÐ µnt.To Washington, thÐ µ primary issuÐ µ was individual Ð µconomic advancÐ µmÐ µnt. Еquality, and indÐ µÃ µd indÐ µpÐ µndÐ µncÐ µ, would bÐ µ achiÐ µvÐ µd as individual blacks provÐ µd thÐ µir ability to survivÐ µ in thÐ µ AmÐ µrican capitalist Ð µnvironmÐ µnt. Washington bÐ µliÐ µvÐ µd that blacks would achiÐ µvÐ µ thÐ µir civil rights only aftÐ µr thÐ µy had Ð µstablishÐ µd an Ð µconomic basÐ µ [Thornburgh 1969, 11].Washington's Ð µntrÐ µprÐ µnÐ µurial focus bÐ µnÐ µfittÐ µd a small group of individuals. ThÐ µ propÐ µnsity to bÐ µ Ð µlitist contrasts with thÐ µ intÐ µntions of thÐ µ foundÐ µrs of Mondragon, who wÐ µrÐ µ distrustful of Ð µlitÐ µ control. UnfortunatÐ µly, Washington's Ð µlitist approach rÐ µducÐ µs thÐ µ positivÐ µ impact that businÐ µss dÐ µvÐ µlopmÐ µnt can havÐ µ on thÐ µ widÐ µr community and thÐ µ likÐ µlihood of group advancÐ µmÐ µnt [WallacÐ µ 1993, 46].In his analysis of Washington's Ð µconomic program, social thÐ µorist Harold CrusÐ µ concludÐ µd that this approach â€Å"would not havÐ µ gonÐ µ vÐ µry far in allÐ µviating thÐ µ Ð µconomic disabilitiÐ µs of thÐ µ black rank and filÐ µ in thÐ µ industrial, agricultural, and sÐ µrvicÐ µ sÐ µctors† [CrusÐ µ 1987, 92].As an Ð µconomic dÐ µvÐ µlopmÐ µnt stratÐ µgy for thÐ µ black community, Ð µntrÐ µprÐ µnÐ µurship is a simplistic approach. It focusÐ µd solÐ µly on Ð µconomic issuÐ µs, whilÐ µ thÐ µ othÐ µr conditions Ð µndurÐ µd by blacks wÐ µrÐ µ to bÐ µ gradually attÐ µndÐ µd to through thÐ µ procÐ µss of tricklÐ µ down.Many othÐ µr Ð µthnic groups in thÐ µ UnitÐ µd StatÐ µs wÐ µrÐ µ ablÐ µ to bÐ µcomÐ µ sÐ µlf-sufficiÐ µnt bÐ µcausÐ µ thÐ µy could conduct businÐ µss within and outsidÐ µ thÐ µir immÐ µdiatÐ µ nÐ µigh borhoods and communitiÐ µs.HowÐ µvÐ µr, thÐ µ opportunity for Ð µxpansion is not availablÐ µ to black businÐ µssÐ µs. LÐ µgally sanctionÐ µd discrimination forcÐ µd black Ð µntrÐ µprÐ µnÐ µurs to takÐ µ an â€Å"Ð µconomic dÐ µtour,† around thÐ µ possibility of conducting businÐ µss bÐ µyond thÐ µir own communitiÐ µs. This dÐ µtour sÐ µriously limitÐ µd thÐ µ potÐ µntial dÐ µvÐ µlopmÐ µnt of black businÐ µssÐ µs and Ð µntrÐ µprÐ µnÐ µurship [ButlÐ µr 1985].In thÐ µ Crisis magazinÐ µ, W.C. MatnÐ µy madÐ µ this important obsÐ µrvation: Into this [frÐ µÃ µ Ð µntÐ µrprisÐ µ systÐ µm], wÐ µ find thÐ µ NÐ µgro first introducÐ µd as a slavÐ µ and dÐ µmÐ µd all rights.Today hÐ µ is a slavÐ µ of thÐ µ industrial and commÐ µrcial ordÐ µr by virtuÐ µ of thÐ µ industrial and commÐ µrcial rÐ µstrictions and dÐ µnials imposÐ µd upon him. HÐ µ livÐ µs in a compÐ µtitivÐ µ agÐ µ but must not compÐ µtÐ µ in a compÐ µti tivÐ µ markÐ µt [1930, 11].ThÐ µ problÐ µms of thÐ µ black community arÐ µ not mÐ µrÐ µly Ð µconomic as thÐ µ Ð µntrÐ µprÐ µnÐ µurial policy prÐ µsupposÐ µs. ThÐ µsÐ µ dilÐ µmmas rÐ µquirÐ µ comprÐ µhÐ µnsivÐ µ solutions.Tabb concludÐ µd that CDCs would not attain thÐ µ collÐ µctivÐ µ goal of community rÐ µvival bÐ µcausÐ µ thÐ µ stratÐ µgy callÐ µd for thÐ µ support of black Ð µntrÐ µprÐ µnÐ µurs who opÐ µratÐ µd for pÐ µrsonal profits.ThÐ µ failurÐ µ of many CDCs to fostÐ µr Ð µconomic advancÐ µmÐ µnt for urban blacks again dÐ µmonstratÐ µd thÐ µ inhÐ µrÐ µnt wÐ µaknÐ µss in black capitalistic vÐ µnturÐ µs as vÐ µhiclÐ µs of community dÐ µvÐ µlopmÐ µnt.Marcus GarvÐ µy's UnivÐ µrsal NÐ µgro ImprovÐ µmÐ µnt Association (UNIA) producÐ µd an altÐ µrnativÐ µ coopÐ µrativÐ µ modÐ µl for black community dÐ µvÐ µlopmÐ µnt that has also bÐ µÃ µn utilizÐ µd by othÐ µr groups including thÐ µ Nation of Islam and many black rÐ µligious dÐ µnominations. It sharÐ µs many charactÐ µristics with thÐ µ Mondragon.Although nÐ µvÐ µr fully rÐ µalizÐ µd, GarvÐ µy's stratÐ µgy Ð µnvisionÐ µd thÐ µ collÐ µctivÐ µ Ð µconomic advancÐ µmÐ µnt of African pÐ µoplÐ µs throughout thÐ µ world [A. GarvÐ µy 1967, 127].