Definitely the latter. Classical liberals are practically an endangered species yet the media often overrepresents them. Here's what I mean:
This graphic also represents why the identity politics everybody complains about are front in center in our political discourse. Cultural/social issues are the main dividing line, far more chasmic than the economic divide.
Yet the Democrats don't campaign on winning on economic issues that are popular..
Yet the Republicans continue to campaign on winning economic issues that are unpopular.