(Though it won't post until later, I may as well try to do something while I sit in this airplane seat.)
Like Brad DeLong, before the recession started I could not have imagined that policymakers would fail to put the unemployed first and foremost in all policy decisions. I was sure the unemployed would come before inflation, before banks, before debt reduction and contrived fights over the debt ceiling. How could we possibly turn our backs on millions of struggling households, especially when doing so creates so many additional long-run problems for individual households and for the economy as a whole? Nothing else would be more important than putting people back to work, and we would, of course, come together and mobilize in a national war against high unemployment.
But I forgot something. With the decline in unions in recent decades, the working class has lost both economic and political power. And at the same time, those at the top end of the income scale have gained power both relatively and absolutely. So why would I have ever thought that the unemployed would come first when they have so little organized political power? Is it any surprise that policy has paid most attention to the issues that just happen to be the things those with the most political power care the most about? What was I thinking?
I suppose I was thinking that politicians were honorable, that money wouldn't trump principle. Silly me. In any case, the question is how to change the balance of power. We could get the money out of politics, but that will never be fully possible. Even with the best of effort, loopholes, bypasses, and the like will always be sought out, found, and exploited too circumvent the rules. That doesn't mean we shouldn't try -- whatever constraints can be imposed are helpful -- but this probably isn't the full answer. We could hope for better politicians, people who represent everyone equally, including the powerless, but I'm certainly not going to count on that either. Finally, we could try to provide (or at least not discourage) a countervailing force, something that replaces the role that unions played for the working class. I'm not completely sure what form this institution should take, workers lack both economic power in wage negotiations and political power to shape legislation in their favor, or how it could happen short of fed up workers finally demanding change. But workers need to have their interests better represented, and the need for a new institution of some sort is clear.