At the political level, the collapse of corporate liberalism was signalled by the disintegration of the Democratic party coalition, which had dominated American political life for over a quarter of a century. With the economic base no longer able to support federal government financing of both defense and social justice in a noninflationary manner, and as tough choices had to be made between competing group demands, elements of the coalition began to fall away from the Democratic party. The defection of the once solid South from the party ranks and the slow but steady decline in the enthusiasm (and thus in votes, contributions, and campaign work) of labor unionists, white ethnics, and Jews was notable. This tendency was first evident on a substantial scale during the two elections of Richard Nixon ( 1968 and 1972) and continued unabated throughout the decade. The oligopolistic corporate sector also exited the coalition. As corporate leaders began to see corporate liberal economic and social policy as a fetter on their competitive position in the global economy, they began to assault the regime's public policies (note their support of neoconservative think tanks like the American Enterprise Institute, the creation of university endowed chairs in free enterprise and sponsorship of university policy centers, the widespread use of advocacy advertising pushing the business point of view), and to increase spectacularly their funding of business Political Action Committees and the Republican party ( Edsall, 1984; Vogel, 1989).
As political scientist Walter Dean Burnham has often pointed out, the disintegration of the Democratic party was very different from the classic realignment patterns of American parties, for most defectors from the Democrats during the 1970s tended not to join the ranks of the Republicans but joined instead the "party of nonvoters." The Democratic party, stripped of many of its voters and coalition partners, was in tatters; the Republican party in the early to mid-1970s was moribund, unable to create a policy alternative ( Burnham, 1981). I would hypothesize that by the end of the 1970s the United States found itself devoid of a stable ruling coalition with an agreed-upon set of policy ideas able to manage and steer the system in a consistent and coherent manner. This is the context within which a triumphant Ronald Reagan tried to form a new policy regime in the 1980s. He failed, but that is a different story ( Greenberg, 1990).