SmartMoney's Power 30

Most of us know that when it comes to the economy, Fed Chairman Ben Bernanke is an important player, and that when we ponder the next big thing on the Web, we need to watch the folks at Google. But few of us are keeping an eye on Sheila Bair and Herbert Allison Jr. Never heard of them? Bair, chairman of the Federal Deposit Insurance Corp., has been in the thick of the battle to shore up America’s banks. Allison, the new CEO of Fannie Mae, has the unenviable job of fixing the mortgage giant.

As the U.S. sweats out one of its toughest financial periods in decades, Americans may wonder not only how we’ll get through it all, but also who will lead us. Wall Street’s crisis has already claimed some of the nation’s best-known financial companies, spooking investors around the globe. On Main Street consumers face a double whammy: declining portfolios and the steepest drop in home prices since the Great Depression. Each year we pick an elite group, names big and small, that will have an important impact on the economy, investments and other areas vital to your pocketbook. As always, people like Warren Buffett and Carl Icahn will play a big role. But so will Sheila Bair and Herbert Allison Jr.

Henry Paulson
Treasury Secretary
Paulson once said there was no “silver bullet” to solve the credit crisis and slumping economy. Then things got worse. So the Treasury secretary helped orchestrate the takeover of investment bank Bear Stearns and steered the government bailout of mortgage giants Fannie Mae and Freddie Mac. He drew the line at rescuing investment bank Lehman Brothers, but proposed a massive bailout of the financial system, including a plan for the government to buy stakes in nine of the nation’s biggest financial institutions. Paulson’s moves will help shape the economy long after the next administration takes office, and his successor will have to pick up where he left off. “If Hank Paulson had his hands full, the next guy will be at least as busy,” says David Rosenberg, Merrill Lynch’s chief North American economist.

Jamie Dimon
CEO, JPMorgan Chase
JPMorgan’s well-heeled customers in New York finally have a convenient place to put their money when they spend their winters in Florida. The bank’s dramatic acquisition of the 2,200 branches of failing thrift Washington Mutual gives JPMorgan Chase more than 250 new outlets in Florida and another 700 in California—and customers Dimon has coveted. Unlike many of his competitors, Dimon, 52, entered the financial crisis with one of the healthiest balance sheets in the business. JPMorgan’s financial muscle enabled the tough-talking CEO to swoop in last spring to acquire investment bank Bear Stearns, for what many see as the bargain price of $1.2 billion. Now former customers of Washington Mutual can expect to see JPMorgan Chase roll out a host of new banking and investment products.

Meredith Whitney
Financial-Services Analyst, Oppenheimer
Bank executives and investors were in denial mode last October, when Whitney predicted that Citigroup would have to shore up its finances by either cutting its dividend, raising capital or selling assets. But then Citigroup stock promptly tanked, CEO Charles Prince lost his job, and the financial-services giant was forced to take all three of those steps. Although Whitney has made her share of mistakes (she was too bearish on Wells Fargo’s performance), her biggest influence now may be in cautioning investors who want to return to financial stocks too soon. She does, however, like the preferred shares of certain banks: JPMorgan Chase, Bank of America and Wells Fargo.

Ben Bernanke
Chairman, Federal Reserve Board
Bernanke, 54, has made eight interest-rate cuts to help stimulate the economy. He’s also joined Treasury Secretary Paulson in presiding over the biggest restructuring of the U.S. financial system since the Great Depression. The success or failure of the historic moves won’t be known for some time, but no one can accuse Bernanke of standing idly by. “We well not stand down,” he said in an op-ed essay in The Wall Street Journal, “until we have achieved our goals of repairing and reforming our financial system, and thereby restoring prosperity to our economy.”

Investment Bloggers
Wall Street has always functioned like a giant chat room—the Internet just made it official, says Paul Kedrosky, 42, who writes the blog Infectious Greed. He and other bloggers make their voices heard with sharp analysis that’s sometimes missing from the rest of the media. Plus, they get to curse and go on tangents. “If I had to do nonfarm payrolls, blah, blah, blah, my head would explode,” says Barry Ritholtz, 47, of the blog The Big Picture.

Kedrosky says traffic on his blog has nearly doubled in the past year, to 210,000 unique visitors a month. And BloggingStocks, one of the most popular financial blogs, has seen traffic grow 36 percent since last year. As the credit crisis continues to pound the economy, they’ll have plenty of fodder in the months to come.

Robert Shiller
Professor of Economics, Yale University, and Chief Economist, MacroMarkets

The housing debacle cemented Shiller’s status as a prophet of doom. The behavioral-finance guru, who could pass for Hugh Grant’s wonky uncle, began warning of a housing bubble in 2003, just three years after his eventual best seller, Irrational Exuberance, warned of a pending stock market collapse. More than an ivory-tower oracle, Shiller, 62, is also the brains behind MacroMarkets LLC, a company developing exchange-traded futures that could help investors hedge against macroeconomic forces such as housing prices and fluctuations in gross domestic product. The S&P/Case-Shiller National Home Price index, developed with fellow economist Karl Case, is one of the most widely watched gauges of the state of the housing market. Shiller says that with all the recent financial turmoil, it could take years “to get the economy really moving again.”

Sheila Bair
Chairman, Federal Deposit Insurance Corp.

A mild-mannered Republican appointed by President Bush, Bair has been a leading voice in Washington pushing for ways out of the mortgage mess, testifying in favor of the housing-relief bill and advocating to make mortgages affordable for hard-hit homeowners. Hardly a screaming liberal, Bair, 54, was just being practical. Mortgages are “worth more if you restructure than if you foreclose,” she says. She had to be even more practical when the nation’s banking system nearly froze, agreeing to increase deposit insurance from $100,000 to $250,000, and joining Treasury Secretary Paulson and Fed Chairman Bernanke in a massive effort to shore up the nation’s banks.

Herbert Allison Jr.
CEO, Fannie Mae
Talk about a tough job. When the Merrill Lynch and TIAA-CREF vet was tapped to run Fannie in September, he was charged with soothing the mortgage giant’s battered investors. If Allison, 65, is successful, consumers should see lower mortgage rates, which in turn could spur some housing demand and alleviate the slump.

Kenneth Lewis
CEO, Bank of America
Lewis, 61, already runs one of the nation’s biggest retail banks, with $1.7 trillion in assets. With the acquisition of Merrill Lynch, the nation’s biggest brokerage firm, he’ll run a global powerhouse with operations from Main Street to Wall Street. But first he’ll have to show that he can merge Merrill’s army of 16,000 brokers into Bank of America with minimal defections of brokers and customers. That’s a tall order, and it comes as the Charlotte, N.C., bank is digesting the $2.5 billion July acquisition of mortgage giant Countrywide Financial.

Warren Buffett
Chairman, Berkshire Hathaway
The financial crisis gave the world’s most widely watched investor a few more places to spend Berkshire’s cash hoard. Within a matter of weeks, he agreed to pump $5 billion into preferred stock of Goldman Sachs Group, invest at least $3 billion in preferred shares of General Electric and pay $4.7 billion for power company Constellation Energy. “Buffett’s dream is to be the last man standing when others have run low on cash,” says Whitney Tilson, of T2 Partners, a hedge fund.

The American Voter

Political pundits have long said that Americans vote with their pocketbooks. Never will it be easier to test that theory than in this election, which comes as everything economic seems to be going wrong: a near-collapse of the financial system, increased fears of a recession, and rising unemployment. More than half of likely voters in a recent CBS/New York Times poll said the most important issue facing the country is the economy, up from just 8 percent at the beginning of 2007. With Democrat Barack Obama planning to increase taxes on the highest earners to pay for health reform and infrastructure investment, and Republican John McCain pledging to spur growth with cuts in corporate and estate taxes, voters will choose between two vastly different economic fix-it plans.