Matt Taibbi says we should run Elizabeth Warren for president in 2012, and the more I read about how the since-appointed members of the Obama administration handled the financial crisis, the more I like the idea:

Oct. 27 (Bloomberg) -- In the months leading up to the September 2008 collapse of giant insurer American International Group Inc., Elias Habayeb and his colleagues worked nights and weekends negotiating with banks that had bought $62 billion of credit-default swaps from AIG, according to a person who has worked with Habayeb.

Habayeb, 37, was chief financial officer for the AIG division that oversaw AIG Financial Products, the unit that had sold the swaps to the banks. One of his goals was to persuade the banks to accept discounts of as much as 40 cents on the dollar, according to people familiar with the matter.

[...] Beginning late in the week of Nov. 3, the New York Fed, led by President Timothy Geithner, took over negotiations with the banks from AIG, together with the Treasury Department and Chairman Ben S. Bernanke’s Federal Reserve. Geithner’s team circulated a draft term sheet outlining how the New York Fed wanted to deal with the swaps -- insurance-like contracts that backed soured collateralized-debt obligations.

CDOs are bundles of debt including subprime mortgages and corporate loans sold to investors by banks.

Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public.

The New York Fed’s decision to pay the banks in full cost AIG -- and thus American taxpayers -- at least $13 billion. That’s 40 percent of the $32.5 billion AIG paid to retire the swaps. Under the agreement, the government and its taxpayers became owners of the dubious CDOs, whose face value was $62 billion and for which AIG paid the market price of $29.6 billion. The CDOs were shunted into a Fed-run entity called Maiden Lane III.

[...] A spokeswoman for Geithner, now secretary of the Treasury Department, declined to comment. Jack Gutt, a spokesman for the New York Fed, also had no comment.

One reason par was paid was because some counterparties insisted on being paid in full and the New York Fed did not want to negotiate separate deals, says a person close to the transaction. “Some of those banks needed 100 cents on the dollar or they risked failure,” Vickrey says.

In other words, Geithner used taxpayer money from one big disaster to paper over the fact that all the other parties were bankrupt, too - and probably still are, no matter what you read in the papers. Wait until the commercial market crashes. Wheee!

OK, the Ben Nelsons out there need to stop mucking up the works, just pocket the cash they took from the health care industry and do the right thing because this study from Harvard is disturbing on so many levels.

Business Week:

Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid. Medically related bankruptcies have been rising steadily for decades. In 1981, only 8% of families filing for bankruptcy cited a serious medical problem as the reason, while a 2001 study of bankruptcies in five states by the same researchers found that illness or medical bills contributed to 50% of all filings.

This newest, nationwide study, conducted before the start of the current recession by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne, a sociology professor at Ohio University, found that the filers were for the most part solidly middle class before medical disaster hit. Two-thirds owned their home and three-fifths had gone to college...read on

It would be nice to repeal that disgraceful bankruptcy bill, but first we need universal health care. And soon, because the country can't take much more of this.

I listened to this Planet Money interview yesterday and it wasn't even close. Elizabeth Warren, a class act in every sense, totally destroyed the host's argument that concerning herself with the economic health of the American family was somehow her liberal "pet cause" and outside her bailiwick as TARP oversight chair. Not that it made any difference in his evident scorn!

NPR may have some nice little essays, but the only time their hosts show anything resembling teeth is when they attack... people who attack corporate interests! From the Columbia Journalism Review's "So That's Why The Press Won't Cover Elizabeth Warren!" by Ryan Chittum:

A couple of times in the last few months I’ve taken the press to task for ignoring the Congressional Oversight Panel and its report on the TARP. I’ve talked to reporters in the biz since and got the impression that many of them don’t really take it seriously because its chairwoman Elizabeth Warren is a liberal who, they say, pushes her agenda.

So it’s worth listening to this entire Planet Money podcast from NPR, where Adam Davidson badgers Warren for more than an hour to justify her existence, so to speak.

If you want a peek inside business-press mentality, and why certain stories get reported and others don’t, you can do worse than start here. It sees Warren as an outlier whose views, based on decades of research, are suspicious. It would never, ever have badgered a former bank exec, say, like this if one had been chairman of the panel. Davidson, like the reporters I referenced above, has been talking to too many bankers and insiders who sneer at someone not inside their bubble. Perhaps he’s trying to prove his objective journalist bona fides at “liberal” NPR by taking it to a liberal.

Warren isn’t legitimate in the eyes of the press, so it just pretty much ignores her—even though she and her co-panelists were selected by Congress to oversee whether the Treasury is spending the $700 billion we gave it in a way that’s best for the economy.

This interview is really cringeworthy stuff from Davidson, who comes out looking pretty bad (which makes it all the more admirable that NPR runs the entire tape). Warren takes this fight going away.

Really, go read the whole thing - and if you have the time, listen to the podcast. The comments are also smart, and this one summed it up nicely:

Adam Davidson essentially admits his own insider-oriented, in-the-bubble reporting style. His comments reflect not so much on Elizabeth Warren but on the breadth and depth of his own Rolodex.