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...history was born before dawn on Sept. 17, when Federal Reserve Chairman Ben Bernanke woke up at 6 a.m., checked his BlackBerry and saw the very thing he had dreaded: the futures market in free fall. Bernanke, Treasury Secretary Henry Paulson and New York Fed president Timothy Geithner had spent the past year staving off one disaster after another, for the most part working behind the scenes. Earlier in the month, they had let investment bank Lehman Brothers slide into oblivion and then ushered another, Merrill Lynch, into the arms of Bank of America. Just the night before, the trio...

Author: /time Magazine | Title: Three Men And a Bailout | 9/25/2008 | See Source »

...final economic act of a Republican President was made all the more stunning by the sight of no less a free-marketeer than Vice President Dick Cheney being dispatched to the Hill to sell it to furious Republicans. But Congress is coming late to this crisis. Paulson, Bernanke and Geithner--whose conference calls can number more than half a dozen a day--have been quietly trying to keep the ship in the channel for months. Treasury Secretary Paulson, 62, was one of Wall Street's toughest dealmakers as CEO of Goldman Sachs. Fed chief Bernanke, 54, is a quiet academic...

Author: /time Magazine | Title: Three Men And a Bailout | 9/25/2008 | See Source »

...offices at the Federal Reserve on Constitution Avenue, where he monitors two computers and a TV while chewing on Necco Wafers, Bernanke is calmer, quieter and prone to offering up a fourth option when three are on the table. Paulson called him "pragmatic, intellectually curious--a courageous guy." Geithner, working from the New York Fed's imposing Manhattan headquarters on Liberty Street, often serves as the bridge between the other two back in Washington. "There isn't anything spoken in anger, but certainly these are men with ideas and can be forceful in how they express them," says one person...

Author: /time Magazine | Title: Three Men And a Bailout | 9/25/2008 | See Source »

...does what depends on which agency has the most authority for the task at hand. Paulson was the primary mover last fall in getting banks and mortgage companies to ease up on homeowners who faced foreclosure, while Bernanke dropped billions into jittery credit markets with a surprise rate cut. Geithner engineered the rescue in March of the investment bank Bear Stearns. In the summer, Paulson horsed Congress into giving him broad authority to seize troubled lenders Fannie Mae and Freddie Mac--which he ended up having to use two months later. And when the three have run into interference from...

Author: /time Magazine | Title: Three Men And a Bailout | 9/25/2008 | See Source »

Ultimately Paulson, Bernanke and Geithner must convince the public that fixing the financial mess requires a dramatic expansion of government power--and in particular, the power of their respective offices. That may be a tough sell, in part because the disaster was as much a failure of the political system as of the financial one. Over the past decade, politicians, scooping up campaign contributions from Wall Street, took down the guardrails that had existed since the Depression. And few were better connected in the corridors of power--or more successful at deflecting proposals for tighter government supervision--than mortgage giants...

Author: /time Magazine | Title: Three Men And a Bailout | 9/25/2008 | See Source »

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