Let's hit the unemployed one more time

A new report from the National Employment Law Project calculates exactly how much [will be cut from unemployment insurance due to sequestration]: Of the more than $80 billion in automatic budget cuts that must occur between March 1 and Sept. 30, about $2.4 billion is being slashed from the federal emergency unemployment benefits program, says NELP, a labor-oriented research and advocacy group.

The organization estimates that upward of 3.8 million unemployed workers will ultimately be affected by the cuts. The average weekly benefit check of $289 is being cut by $43, or about 15 percent.

“It is the workers who have benefited least from the economic recovery who are bearing the largest share of the burden of the sequester,” the organization said in a statement.

In a recent defense of the 1 percent, Harvard economist Greg Mankiw admitted it might be bad if the rich got richer by sucking cash from the economy without giving any value back. A new study suggests many of the rich -- especially bankers and CEOs -- are doing just that.

Josh Bivens and Lawrence Mishel, economists at the Economic Policy Institute, a left-leaning think tank, argue in a study responding to Mankiw that most of the rise in income inequality over the past few decades is due to the soaring pay of CEOs and Wall Street bankers who are milking money from the markets rather than generating much in the way of economic production.

"A substantial part of the extraordinary rise of top 1 percent incomes is not a result of well-functioning markets allocating pay according to value generated, but instead resulted from shifting institutional arrangements leading to shifting of rents to those at the very top," Bivens and Mishel write.

The technical term for this is "rent-seeking." Mankiw, a former economic adviser to President George W. Bush and Mitt Romney, suggested in his recent paper, "Defending The One Percent" that there wasn't much of this going on, that the 1 percent are just richer than you, and getting even richer all the time, because they are better than you.

But he does admit that rent-seeking could be a problem:

If the top 1 percent is earning an extra $1 in some way that reduces the incomes of the middle class and the poor by $2, then many people will see that as a social problem worth addressing. For example, suppose the rising income share of the top 1 percent were largely attributable to successful rent-seeking. Imagine that the government were to favor its political allies by granting them monopoly power over certain products, favorable regulations, or restrictions on trade. Such a policy would likely lead to both inequality and inefficiency. Economists of all stripes would deplore it. I certainly would.

Unfortunately, this is pretty much what has happened in the past 30 years, as Bivens and Mishel show, with numbers.