Dem party is now firmly anti-New Deal
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While there have been two parties called the Democrats and the Republicans since the mid-19th century, these enduring labels mask the fact that party coalitions change every generation or two. Franklin Roosevelt created a new party under the old name of the Democrats by welding ex-Republican Progressives in the North together with the old Jacksonian Farmer-Labor coalition. The contentious issue of civil rights nearly destroyed the Roosevelt Democrats in 1948 and finally wrecked it in 1968, when George Wallaces third party campaign proved to be a way-station for many working-class whites en route from the Democrats to the Republicans.
Todays Democratic Party, in contrast, took shape between 1968 and 1980. Although George McGovern lost the 1972 presidential race to Richard Nixon in a landslide, the McGovernites of the New Politics movement wrested control of the Democratic Party from the old state politicians and urban bosses of the Roosevelt-to-Johnson New Deal coalition. Robert Kennedys aide Fred Dutton, one of the architects of the disempowerment of the old New Deal elite, called for a new coalition of young people, college-educated suburbanites and minorities in his 1971 book Changing Sources of Power: Politics in the 1970s. Sound familiar? Thats because, nearly half a century later, the same groups are the core constituents of todays Democrats.
Jimmy Carter was the first New Politics president (or New Democrat or neoliberal, as they were later called). He was a center-right Southern governor who ran against big government and touted his credentials as a rich businessman. He did not get along with organized labor, one of the key constituencies of the Roosevelt Democrats. His major domestic policy achievement was dismantling New Deal regulation of transportation like trucking and air travel. He appointed a Federal Reserve chairman from Wall Street, Paul Volcker, who created an artificial recession, the worst between the Great Depression and the Great Recession, to cripple American unions, whose wage demands were blamed for inflation.
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