Principle and Practical Rationality During the Financial Crisis
Chapter 6: The rescue of the investment bank Bear Stearns
This chapter provides a systematic analysis of the Bear Stearns case in terms of decision making and meaning making. Our analysis begins with a brief explanation of the main ideological principle from which Bush and Paulson departed: the doctrine of moral hazard. However, we find the main strategic crisis leaders in this case - including President George W. Bush and Treasury Secretary Henry Paulson, who were the most predisposed to uphold this doctrine - modeled Pragmatist political crisis management behavior in this phase of the crisis. With respect to decision making, their crisis leadership exhibited anti-dualism, fallibilism, experimentation and deliberation; with respect to meaning making, they exhibited anti-dualism and fallibilism, but not experimentation or deliberation.
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