(FORTUNE Magazine) – His resume is enough to inspire old-fashioned awe: Harvard undergrad, Rhodes scholar, Harvard Law, Lazard Freres partner, board member at Pfizer, PepsiCo, and AOL Time Warner, stints in both the Carter and Clinton administrations--including one as director of the Office of Management and Budget at that magical (and fleeting) moment when the nation's accounts moved from deficit to surplus. But that's not why Raines is on this list. Nor is he here because he's a particularly glamorous, dynamic, attention-grabbing CEO. Says the man himself: "What is it--a top 25? I should be 26."

No, the 54-year-old makes the cut because he runs Fannie Mae, the government-agency-turned-corporate-juggernaut that is the heart of the American economy. Fannie Mae, with its $924 billion in assets, is the nation's second-largest financial institution, trailing only Citigroup. More to the point, it dominates the mortgage market that has kept the U.S. economy afloat for the past two years. By buying mortgages at a record pace, Raines and Fannie helped bring rates down to their lowest level in 40 years. That kept the housing market going strong and stimulated an unprecedented wave of refinancing that pumped hundreds of billions of much-needed dollars into the economy. What's more, Raines has successfully staved off new regulation in the wake of recent accounting difficulties at Freddie Mac, Fannie's younger brother. That may be, in the end, the best explanation of Franklin Raines's power. Official Washington is afraid that, if it messes with his company, it will destroy the housing market and with it the U.S. economy. How many other CEOs can say that? --Justin Fox