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National Politics Fri Sep 25 2009
What should people be out in the streets chanting about? End of life counseling to provide for living wills--ie, the pretend "Death Panels" of bathshit crazy propaganda fame? Or the securitization of life settlements, essentially a giant Death Pool that is making some people really rich?
The mechanism here is basically the same as the one used for mortgage-backed securities. Wall Street buys up life policies from elderly or ill people, who sell them for up-front cash that can be enjoyed before actual death (similar to those brokered arrangements with terminally ill HIV patients that received so much attention in the late eighties). They then take those policies and dump them into a securitized pool, where they can then be packaged as bonds and sold to investors who would get paid off when the policyholders die.....
But even beyond that... what the fuck??? This feels like financial innovation as practiced by Josef Mengele meets the Zucker Brothers; not just evil, but wacky evil. I don't even want to think about what happens when Goldman Sachs suddenly has a large financial stake in the premature deaths of a bunch of old people. Where are the crazy police? Where is the crack federal crazy squad with the big butterfly net? I don't know about betting on anyone's life expectancy, but I think I'd like to bet on whether or not this idea ends well.