Your Money & Your LifeOctober 3rd, 2009

People with too much money are always looking for ways to use their excess to make more. They call this “investment.” They might buy shares in a company or purchase a piece of land or contracts to sell wheat. Lately, investment brokers have been promoting a new type of money-making scheme: insurance on other people’s lives.

Suppose you’re the insured on a paid-up or nearly paid-up fifty-thousand-dollar life insurance policy and you need money. The cash value of your policy is much less than the death benefit, and you won’t be around to collect that, so you find yourself sitting on a valuable asset and broke at the same time. Enter a Wall Street outfit, maybe in the form of a TV commercial, with an offer to buy your policy for twenty-five thou cash. All you have to do is cut your beneficiary out and name the fund as new beneficiary. You take the deal, you and thousands of other cash-strapped insureds.

The Wall Streeter bundles up all those policies and sells shares in them. As the insureds exit the scene, the fund collects their death benefits, double and more what it paid for them, and the investors make money. They’ve placed a bet that you and the others–I don’t know what to call this group: collaterals, maybe–will die sooner rather than later, thus making the investors richer.

If you were a Wall Streeter putting together an exotic investment vehicle like this one, you would probably look for insureds of advanced age and limited resources in areas with a relatively low life expectancy. The sooner they die, after all, the better for your investors. In fact, your investment instrument would create an incentive among your investors to do everything they could–other than murder–to put an end to the people in the pool.

What might these investors do to improve their prospects of making money? Anything to shorten the lives of poor people, most likely. Oppose public assistance. Oppose universal health care. Oppose nursing home care. Support war. Encourage polluting industry. Limit food subsidies. Legalize euthanasia. Arm everybody. Anything that increases sickness and mortality will work to their benefit. A lot of people other than their fund’s insureds might have to die to make them a decent profit, but that’s capitalism, after all, isn’t it? Class warfare at its classiest.

Notice any similarities between the investors’ objectives and the legislative bounty of the 111th Congress? This is the Congress that claims to have a Democrat majority but that hews ever so loyally to the Republican agenda. With the possible exception of a direct poverty extermination policy, all of the measures that would aid investors in the insurance fund have the support of 100% of Republicans and enough Democrats to command a congressional majority.

It’s no mystery why this has happened. Congress is bought and paid for by people with too much money. Part of using excess money to make more money is buying elected officials, so that they will adopt friendly policies. Now, under a Washington standard that encourages new and brutal forms of investment, the rich will get so much richer and the poor will not only get poorer. They’ll get dead. What a deal.