The neoliberal school of thought has and had significant failings. Still, I think the primary cause of its declining fortunes is that, as tends to happen with once-ascendant political tendencies, it had a lot of successes. The most persuasive neoliberal ideas have become conventional wisdom. The netroots shares the neoliberal critique of interest group brokerage as a model of party-building. Absolutely nobody nowadays makes the sort of arguments that you heard from the 1980s-vintage left about the possibility of winning elections purely through increasing voter turnout. And a lot of the low-hanging policy fruit has already been implemented. Nobody thinks TANF will be re-reformed as an open-ended entitlement. Nobody thinks NAFTA will be rescinded. Nobody thinks we’re going to re-regulate the airlines or restore the government-sponsored telephone monopoly. I even think people have privately reconciled themselves to the fact that race-based affirmative action is going to fade away. And so on and so forth.
I’ll go further. Not only will neoliberalism’s policy accomplishments not be rolled back, they were good ideas. NAFTA was a good idea. Welfare reform was a good idea. Airline deregulation was a good idea. Hell, a shift to income-based affirmative action would be a good idea. Neoliberal ideas worked, and yet for some reason there’s been a massive, mostly rhetorical backlash against them. God knows why.