The Democratic Party after the 1984 elections:

[Heimdal]

The idea of the Democratic Party clinging to the New Deal and big government liberalism during the 1970s and 1980s is a misconception. Carter campaigned on turning welfare into workfare and cutting government bureaucracy in 1976. In his second State of the Union address he stated that “government cannot solve our problems, it can’t set our goals, it cannot define our vision. Government cannot eliminate poverty or provide a bountiful economy or reduce inflation or save our cities or cure illiteracy or provide energy.” Walter Mondale has been derided as being some sort of old fashioned tax-and-spend liberal. Mondale actually declared that the overall goal of his administration would be deficit reduction.

There is a notion that the Democratic Party was in the grip of European style social democrats and left wing activists like Jesse Jackson, before Bill Clinton and the DLC saved the day. That is however incorrect.

[Heimdal]

It might be. Depending on where the Democrats go the next few years, economic policy might become a schism within the party. It seems to me that the current democratic coalition is based on cultural liberalism, and a moderation in regards to taxes and fiscal policy. Opposition to abortion and gay marriage is obviously not going to stage a comeback within the party. However, there are obviously elements in the party that would favor a far more populist economic policy. If that issue gains saliency, it might drive a wedge between the DeBlasios and the Cuomos of the party.