Two weeks before Thanksgiving in 2003, top officials from Texas Governor Rick Perry's office pitched an unusual offer to the state's retired teachers: Let's get into the death business. Perry's budget director, Mike Morrissey, laid out a pitch that was both ambitious and risky, according to notes summarizing the meeting provided to The Huffington Post. According to the notes, which were authenticated by a meeting participant, the Perry administration wanted to help Wall Street investors gamble on how long retired Texas teachers would live. Perry was promising the state big money in exchange for helping Swiss banking giant UBS set up a business of teacher death speculation. All they had to do was convince retirees to let UBS buy life insurance policies on them. When the retirees died, those policies would pay out benefits to Wall Street speculators, and the state, supposedly, would get paid for arranging the bets. The families of the deceased former teachers would get nothing.

Guess what the latest tea party heartthrob tried to do behind closed doors:

The scheme was thwarted, but for the investors, the benefit of betting on life insurance policies would have been that they wouldn't have had to pay taxes on the profits. Essentially, the Perry administration was asking Texas teachers to help turn the state government into a giant tax shelter by helping speculators exploit the tax treatment of life insurance policies.

If the scheme had succeeded, it would have generated huge profits for its leading champion at UBS, former Senator Phil Gramm. Gramm promised Texas a slice of the action, so in effect, the state of Texas would have been getting a backdoor subsidy from the tax code. And to help hide the deal from the scrutiny of regulators, Gramm structured the scheme to avoid federal scrutiny and lobbied state regulators to look the other way.

I wouldn't be shocked if tea partiers looked at this and gave Perry a pass. What could be wrong with setting up a tax shelter? I mean, corporations are people too, right? But for everybody else, this is a perfect example of the kinds of things that went wrong with the financial industry in the 2000s.

Fortunately, the teachers rejected the deal, but if Rick Perry had been able to get his way, Gramm and his cronies would have generated huge profits at taxpayer expense, exploiting weaknesses in our tax code without creating anything of any value at all.