The entire nation—Jeremiah is reporting here on Judah around the time Nebuchadnezzar invaded in 607 BC—was spiritually and morally sick. "And the priests rule by their own power" means in more modern language that the priests were functioning on their own authority, that is, they had pushed the law of God aside.
The people loved it because in so doing, they allowed themselves to be deceived into thinking that the restraints and penalties of God's law would not affect them. "It will not happen to me." That is what God shows happened in the Garden of Eden. Satan said, "You shall not surely die," and Adam and Eve became convinced that the penalty for sin would not affect them if they disobeyed what God said. They fell for what Satan sold them.
Why does God concentrate on morals in His Book? There are many things He could have written about, but He chose to write a great deal about the morals of the people with whom He had made a covenant.
One reason is that morals are like a weathervane. They show the direction a nation, a church, or an individual is headed in.
A second reason why God concentrates on morals focuses on the prophets and the preachers. Why? Because He has appointed them to be the conscience of His people. Preachers tend to lead the people either into morality or immorality—one or the other. They are like the tip of the spear or the point of an arrow that points the direction of the nation. They are leading indicators. So it says in verse 30, "An astonishing and horrible thing has been committed in the land: the prophets prophesy falsely, and the priests rule by their own power."
Even if a minister is not doing his job, pointing out the sins of the people for whom he is responsible to God, we still, individually, have the responsibility to obey God regardless.