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Despite all the simplistic crap put into History Channel documentaries about the 60's, the political landscape of the time is only now being analyzed with any accuracy.
Since I was alive then and old enough to read a newspaper, but not old enough for college, this is what I remember:
1.) Lyndon Johnson succeeded in pushing through many social "liberal" policies - Medicaid, Medicare, the war on poverty, tons of money for HUD, Headstart, culminating in the passage of the Civil Rights Act. In this Johnson was a Roosevelt Democrat, who was his hero as a kid.
2.) Johnson was pretty weak on foreign policy and was initially reluctant to get involved in Vietnam. However he had many advisors, graduates of respected Ivy colleges, who convinced him to send more troops. For whatever the reason, insecurity over his own lack of education, or because he was really convinced, Johnson took the plunge, and we all know how that ended up. (By the way, I'm not letting Johnson totally off the hook, it was always his decision to make.)
3.) So enter the young generation of "liberals" many of whom were well-intentioned "social" democrats who wanted to defend civil rights, improve education and child welfare, you name it. Many had been inspired by Kennedy. However, the "liberals" who got the most attention were the campus liberals who opposed the war. A lot of the protest against Johnson had a hypocritical tinge to it. After all, he was just some Texas hick who fell into the limelight because of the murder of Kennedy. Far better to drop all responsiblity in his lap rather than the advisors they might meet up with at a future alumni event.
4.) So did the anti-war protesters deserve the contempt they got at the time? Not in the sense that they were wrong about what they were protesting, but I have always bristled at the suggestion that massive protests led to the end of the Vietnam War. I call hogwash. What turned MOST people against Vietnam was TV coverage that was in their face every evening. The Bush administration understood this very well when they banned pictures of coffins coming off planes at the beginning of the Iraq War. Also, most war protest leaders could never convincingly counter the perception of many people that they were using their student deferments to stay home and be obnoxious, while poorer people of all colors were drafted and sent "over there" post-haste.
So by the end of the 60's, "liberal" was not associated with social reform or ideals, but linked to a bunch of college kids unwilling to "defend" their country. This was the prelude to "liberal" being linked to unpopular cultural issues in the 70's. By then the perception was that EVERY person under 30 had been a war protesting, atheistic, sleep-with-anyone, commie-loving brat.
The South went Republican, even though they were, by far, the biggest recipients of Johnson's social programs. (But then again, black people were recipients too, a point that was driven home over and over and over again, until most forgot that more whites than blacks collected welfare and social security benefits.)
So I think we DO need a new label. As a previous poster suggested, Social Democrat is not bad, except for the fact that the word "social" sounds too much like "socialism" but then most of the people screaming "socialism" are hopeless a**hats anyway, so who cares?