Kevin Phillips (a smart populist and New Deal Republican) wrote in _The Politics of Rich and Poor_ (1990):
***** ...Jimmy Carter, the only Democratic president to interrupt the long Republican hegemony after 1968, was accused by historian Arthur Schlesinger of "an eccentric effort to carry the Democratic Party back to Grover Cleveland." Despite his support for substantial new federal regulations, Carter clearly deviated from the Democratic party's larger post-New Deal norm by his candid insistence 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." Carter built foundations that would become full-fledged conservative architecture under Reagan: economic deregulation, tax-rate reduction (for capital gains in 1978), and tight-money Federal Reserve Board policies. Federal Reserve Board chairman Paul Volcker, a high-interest-rate conservative central banker, was a nominal Democrat appointed by Carter in 1979. Congressional Democrats even echoed their policies of the 1920s by colluding in the bipartisan tax-bracket reforms of 1981 and 1986. Thus, by 1988, Democrats could hardly criticize Reagan's tax reductions, particularly those of 1986, although polls documented public unhappiness.... (48-9)
...The second big redistributive spur was Washington's decision to let Social Security tax rates climb upward from 6.05 percent in 1978 to 6.70 percent in 1982-83, 7.05 percent in 1985 and 7.51 percent in 1988-89 -- a schedule originally voted in 1977 under Carter -- while income tax rates were coming down.... (80)
...Conservatives, for their part, hailed deregulation on free-market, antiregulatory and probusiness grounds.... A significant minority of liberals found themselves endorsing deregulation as a means of asserting consumer interests against regulated business monopolies. Carter's election in 1976 merged some of these discordant attitudes and signaled a deregulatory coming-of-age. In March 1977 Carter promised: "One of my administration's major goals is to free the American people from the burden of over-regulation." Within a year he had signed airline deregulation legislation, and by 1980 had also begun to deregulate trucking, railroad and interest rates.... (93)
...Organized labor and people in small towns and rural areas were seriously hurt by deregulation. Alfred Kahn, who promoted deregulation in the Carter administration, acknowledged in 1986 that three million union members -- in airlines, telecommunications, trucking, bus transportation and others -- took a severe blow. Workers in regulated industries, he explained, had often received 30 percent to 100 percent higher pay than people with comparable skills in the economy at large. "What had built up," Kahn said, "was an elite of American labor in protected industries. In a real sense, this elite of machinists and pilots and others was exploiting anyone whose average pay was much lower but who had to pay higher prices." Federal and state regulation had allowed these costs to be passed along to consumers, so when competition took over, wages and permissive work arrangements in these same industries declined. Labor would have faced difficulties enough times in the early 1980s without deregulation; with it, the downward or two-tier pressure on wages became painful.
Rural areas were hurt by failures and takeovers of local financial institutions and by the way transportation and telephone deregulation gave companies the option to eliminate local services or the flexibility to charge appreciably more for them.... Byron Dorgan, the Democratic congressman from North Dakota, complained in 1983 that "there have been some benefits from deregulation, but they have gone largely to the population centers, while the costs have gone to rural areas. It's the same old economic cow -- it feeds in the rural areas but is milked in the cities."...
As for air travel, during the four years following deregulation in 1978, weekly departures from large cities had risen 5 percent. Weekly departures from small towns, by contrast, had dropped 12 percent. By 1988 approximately 140 small towns had lost all their air service, and in 190 others large airlines had handed over responsibility to smaller commuter carriers lacking comparable comfort, convenience and safety.... (98-9) *****
Phillips is right. The Carter administration signified the move away from the New Deal reformism & Keynesianism, due to the latter's inability to solve stagflation within its framework, among other reasons. Time to re-read James O'Connor's classic _The Fiscal Crisis of the State_ (1973)? Also, it's interesting to look at Antonio Negri and the politics of _Autonomia_ as the mirror image of Keynesianism. Negri's critique of law of value through his reading of _The Grundrisse_ -- "_The form of value is pure and simple command, the pure and simple form of politics_" (_Marx Beyond Marx_) -- turns out to incorrect & misleading, trapped in the historical conjuncture that it sought to overcome.
Yoshie