I never bought into the bullshit about Democratic overreach in the '60s, '70s and '80s and how the party had grown so ideologically extreme that it had to be dragged back to the center by the centrist Third Label No Way types. The narrative was always a conservative device to portray Democratic standard-bearers like George McGovern (who was a bomber pilot in World War II) as a dangerous radical compared to heartland conservatives such as Ronald Reagan (who spent the war on a studio lot in Culver City), and that's likely why neoliberalism-as-tonic originated with so-called "New" Democrats who hailed disproportionately from conservative, right-to-work states like Arkansas and Tennessee---traditional Democratic strongholds that were trending gradually rightward due in great part to racial politics. Did we have our radicals? I suppose, if you want to call people like Tom Hayden or Bobby Seale "radicals." But leftists who held elective office in those days, like Seale and Hayden, were relegated to the fringes by their own party leadership. They never held positions of power and prominence within their own party. There's just no comparing them to people like Jim DeMint and Ted Cruz today.
I think the real driver behind the embrace of neoliberal governing principles was, as it is with so many other things, money. The old farmer-labor alliance that supported Democratic officeholders had pretty much evaporated by the 1980s, and a fresh source of campaign cash was sorely needed. Enter an opportunistic Governor like Bill Clinton, who learned the hard way that nothing gets done in a state like Arkansas unless the Walton family, the Tyson family, and the JB Hunt family agree to it, and voilá! a brand new political entity that soft-pedaled corporate regulatory reform and hewed to the center on culture-war issues: A Democratic party even Republicans could love! Of course, that didn't happen, and for unilaterally dragging his party several degrees to the right, the President was rewarded for his efforts by getting impeached.
But none of this should mask the reality that the grand unifying theme underlying neoliberalism isn't keeping the party "relevant" in a post-New Deal era but Machiavellian expediency: Because it's a lot easier to shake the loot out of corporate America if you give corporate America most of what it wants.
---Baron V