In moral philosophy the lifeboat problem is a clean way of presenting the needs of the many outweighing the needs of the few. What do you do if you find yourself one of a handful of people in a lifeboat, say eight? There is food enough only to keep six alive until an island is reached. Two must be sacrificed for the majority to survive. What do you do? Is it ethical to take the lives of a few to save the many?
This is no idle philosophical thought experiment. It has been faced in the past: by the members of the Donner Party as they crossed the Sierra Nevada in the winter of 1846-47; the survivors of Uruguayan Air Force Flight 571 after their crash in the Andes in October, 1972; and by many military men in combat throughout history.
This is arguably the form of the problem the United States now faces. The solution currently being ineptly implemented by Timothy Geithner and Ben Bernanke involves the very opposite of the standard lifeboat solution. The well-geing of hundreds of millions of Americans are being sacrificed to serve the well-being the limited number of Wall Street executives and shareholders who are the immediate beneficiaries of US taxpayer generosity.
The Standard Claim is that the financial system must be saved if the economic system of the nation as a whole is to avoid a Hobbesian war of all against all. Whether this is indeed true and what it says about the nature and grave injustice of American Capitalism is the subject of another essay.
For the purposes of this inquiry, the truth of the Standard Claim is irrelevant. Let us take it that the financial system of the United States must indeed be bailed out in some sense, that it must be re-capitalized from some source.
The Obama Administration has taken it as an article of faith that the American people collectively must be the source of any funds for a bailout. A growing spectrum of critics from Alan Greenspan on the right to Paul Krugman and Joseph Stiglitz on the liberal end argue for nationalization.
Which of these two approaches is appropriate is also largely irrelevant to the subject of this essay.
There is an alternative source of funds, whether or not the Obama or the Nationalization approach is the way to go. The proper source of funds is the that population which has most benefited from the greed and crimes of the past 30 years.
Before the current market declines the wealthiest 15 (fifteen) Americans alone had a combined worth of over $300 billion. The combined worth of the wealthiest 400 Americans is in the neighborhood of $1.5 trillion. The combined wealth of the most fortunate 1000 or 2000 exceeds that by still more.
Why not demand of those who have benefitted most — arguably at our expense — the greatest financial sacrifice? A graduated scheme could be managed, leaving all of these fabulously wealthy people a great deal wealthier than the vast majority of us.