September 18, 2008 was a very important date in the history of economic policy. On this date, lawmakers in the House and Senate met to discuss with federal reserves a $700 million plan to stop the financial market credit freeze. This controversial decision had a great impact on the financial market and changed the economy from then on. This situation resulted from Wall Street betting heavily on the risky real estate market. The collapse of the real estate market has had a domino effect on financial markets. Bear Stearns was a global investment bank. Word spread that they were running out of money. It was soon discovered that Stearns was purchasing huge amounts of mortgages and then turning them into securities. This term is called toxic assets. Tim Geithner, head of the Federal Reserve, initially considered simply letting Bear Stearns fail, but quickly learned that doing so would not be a wise option. The feds learned that the Bears had many deals that incorporated credit default swaps. Credit default swaps are insurance on bonds, since if they go bad the insurer would pay the insurance portion. Bear Stearn's failure to repay its debt would have had direct consequences across Wall Street and around the world. Systemic risk as some would say. The idea that the risk to the financial system as a whole would be too great if Bear Stearns were allowed to go bankrupt. Unfortunately the Federal Reserve was unable to directly give the money to Bear Stearn. So they came up with a plan to give the money to JP Morgan, the bank that backed Bear, and then pass it on to Bear Stearns. Former Treasury Secretary Henry Paulson got involved. Paulson believes the market was doomed to fail if a real adjustment with… middle of the paper… did this. Pragmatism and not ideology should govern politics. Pragmatism according to the Merriam-Webster dictionary is a logical way of doing things or thinking about problems that is based on managing specific situations rather than ideas and theories. While ideology is a set of ideas and beliefs of a political group or party. The struggle between these two is that one claims that there is a united way of thinking and doing something, pragmatism. While ideology is based on time. For example, Republicans have pressured Paulson to let various financial players collapse, insisting that the government has no role in the market. This way of thinking, especially in the situation where everything else has already failed, is very ideological. While the pragmatic approach would be to realize that something must be wrong in the market, especially if it can't fix itself.