Keep almost touching on this idea in my posts, so thought this could use a little exposition. In my view, there are three major ideological factions in American politics:
Conservatives: The loyal opposition. Tradition is good, don’t change what works. Major weakness: Can’t decide when, exactly, they want to preserve; agree with Progressives of not that long ago, so Progressives of today assume they can just wait them out. Very weakly right-wing.
Progressives: “Liberals”, Moldbug’s “Universalists”. Moldbug enumerates the core beliefs of this faction as fraternalism, pacifism, social justice, and communitarianism, that’s a reasonable summary. Major weaknesses: Sometimes confuse ideals for reality, ideological blindness leads to self-defeating compromise. Left-wing. I more-or-less agree with these guys.
Big Business: “Neoconservatives”, “neoliberals”, “free market proponents” (though not actually in favor of a free market, their policy is more like “Keynes at home, Friedman abroad” or “privatized profits, socialized losses”). Major weaknesses: Sometimes confuse ideals for reality, ideological blindness (or worse!) leads to global economic collapse. Left-wing in right-wing sauce.
(I’m still not quite satisfied with that name for the last, but can’t come up with any better.)
Both political parties have been rather significantly captured by the Big Business faction (Republicans thoroughly, Democrats to a very large extent post-Reagan). The Republicans pay lip service to Conservatives (and some Republican politicians are actually Conservatives), but policy-wise deliver almost nothing to that faction. The Democrats pay lip service to Progressives (and many Democratic politicians are actually Progressives), but policy-wise deliver little to that faction.
The Progressive and the Big Business faction are both left-wing, but they are two distinct, mutually incompatible ideologies. Compromises between the two tends to produce perverse results:
- Minimum wage and workplace safety standards plus an opposition to “trade barriers”.
- Food safety standards plus an insistence that regulation must apply to small, transparent family farms as well as big, secretive factory food-processing operations.
- FDIC plus bank deregulation.
None of these ideological factions are centrally organized, so nothing prevents people from trying to set up their tent at both camps and nothing prevents Big Business from appealing to Progressives on Progressive grounds. Which they have done fairly effectively: Promoting “free trade” on the basis of brotherhood (framing protectionism as xenophobia) and social justice (“economic development”). Promoting context-blind regulation as an appeal to fairness. Selling consumer protections that mostly benefit corporations on the basis of the former aspect (even when it’s the sort of disaster mitigation that makes disaster more likely).
My guesses for why such compromises are so tempting:
- Progressives think they are still compromising with Conservatives, though present-day Republicans are anything but. Progressive/Conservative compromises tend to not be so perverse. And they tend to be a long-term win for Progressives.
- People don’t get the concept of a compromise with perverse results.
- “Doing something” is more politically advantageous than “doing nothing”, even if it’s actually worse, in large part because of the previous point.
- Progressives believe that talking things out and arriving at a compromise is in general a good way of solving problems and thus are reluctant to notice that this doesn’t work so well in a broad class of situations.
ComplexMeme 
"2. People don’t get the concept of a compromise with perverse results."This is a very serious problem which stems in general from the shallow empiricism that most human beings seem to possess as their only active forms of reasoning. Think about it in various applications, the Broken Window Fallacy, Taking Politicians at their Word, and the 'deliberative conceit' of democracy (see Mark Pennington http://vimeo.com/12007756 ).One major reason this doesn't work is, as Ludwig von Mises pointed out, that history does not 'explain' itself, complex historical phenomena can only be understood by applying a logical theory of individuals and society. The 'pragmatist' believes he can explain history by reference to the 'facts', but, of course, this simply makes him blind to the theoretic/ideological conceits that he already abides by.As Keynes famously observed, “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” Ironically this is true especially of the modern corporatist left (Big Business), who accept Keynesianism despite never having read a word he wrote.Interesting to see someone else interested in MM and deconstructing the myth of American politics. Check out my blog!
LikeLike