"Dead Peasant Insurance" — A comment on the Rick Perry dead teacher’s scheme

We wrote here about the Rick Perry scam in which he tried to create what sounds like derivatives — insurance-policy-backed bets — on the deaths of elderly Texas teachers.

Shares in those bets would then be sold to the giant European bank UBS, who would market them as investments. Perry and Texas would get a kind of "finder's fee" or creator's fee. UBS would get commissions on the sale. UBS hack Phil Gramm (of Gramm-Leach-Bliley) would get a fee for coming up with the scheme in the first place and pulling it off for his client.

And the investors would see cash if and when these elderly teachers triggering insurance payouts by joining the "choir invisible." To sweeten (hasten) the deal, Perry simultaneously proposed reducing health insurance overage for these teachers. It came apart when the teachers refused to sign up.

I can't imagine a worse form of predation. Cold; near sociopathic, at least in appearance.

In fact, this kind of scheme has a name: "Dead Peasant Insurance". The lord of the manor takes out insurance on his peasants, works them to the bone, pockets their created wealth, then gets a nice little present when they die. It's a win-win.

Here's Michael Moore on Dead Peasant Insurance, from his film Capitalism: A Love Story (h/t Digby):



A short, powerful, scary clip. Your "job creators" in action, ladies and gentlemen; here till you drive them out of business.

GP