WASHINGTON — The response to the gravest financial crisis in generations has been engineered to a remarkable degree by a committee of three.
From the rescue of Bear Stearns Cos. to the takeovers of Fannie Mae, Freddie Mac and American International Group Inc., all the key decisions have been made by Treasury Secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke and Timothy F. Geithner, the president of the Federal Reserve Bank of New York.
It is this unusual collaboration among a consummate deal maker, a professor and a seasoned public servant that could determine how the nation weathers the economic storm. Despite their disparate backgrounds, the three men have formed a close, informal partnership built on rapid-fire phone calls and open debate that breaks the mold of Washington policymaking.
As they chart a government response to the crisis, the stakes could hardly be higher. If they succeed, they could tame the economic downturn and orchestrate a restructuring of Wall Street with minimal collateral damage. If they fail, the toll could be millions of jobs, trillions of dollars in lost wealth and a crisis of confidence in global capitalism.
Paulson, Bernanke and Geithner have spent most of their careers in different worlds. They barely knew one another before beginning their current jobs and still rarely socialize -- though they have spent more time working together in recent months than with their wives.
Paulson, 62, is an investment banker who rose through the ranks of Goldman Sachs Group Inc. to lead the firm. A lanky former Dartmouth College offensive tackle and an intense workaholic, he said he agreed in 2006 to become the Bush administration's third Treasury secretary to prepare the government for a possible market crisis.
Bernanke, 54 and calm of demeanor, is one of the foremost scholars of financial crises, especially the Great Depression. Before being named Fed chairman in 2006, the largest organization he had run was Princeton University's economics department.
Geithner, 47, was a career staff member at the Treasury Department when Lawrence Summers, then a Treasury undersecretary, plucked him from obscurity in the early 1990s. He became a key member of the group that guided the Clinton administration's response to the international financial crises in the 1990s and has been honing his knowledge of Wall Street since taking over the New York Fed in 2003.
