"The DLC was founded by Al From in 1985 in the wake of incumbent President Ronald Reagan's defeat of Walter Mondale in the 1984 presidential election. Other founders include Democratic Governors Chuck Robb (Virginia), Bruce Babbitt (Arizona) and Lawton Chiles (Florida), Senator Sam Nunn (Georgia) and Representative Dick Gephardt (Missouri).<3>
The model on which the Democratic Leadership Council was built was the Coalition for a Democratic Majority.<4> Founded by "Scoop" Jackson Democrats in response to George McGovern's massive loss to Richard Nixon in 1972, the CDM was dismayed by two presidential election losses and the organization's goal was to steer the party away from the New Left influence that had permeated the Democratic party since the late 1960s and back to the policies that made the FDR coalition electorally successful for close to 40 years."
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http://en.wikipedia.org/wiki/Democratic_Leadership_Council>
This part, "away from the New Left influence that had permeated the Democratic party since the late 1960s and back to the policies that made the FDR coalition electorally successful for close to 40 years.", is where the DLC went wrong to begin with. We shouldn't have steered away from the "New Left." The Democratic Party should have married the Old Left and the New Left together, to create a truly progressive party.
I guess the moral of the story is: the Dems drew the entirely wrong conclusions from Reagan's election victories, and so went to the right and allowed corporatists to co-opt the Democratic Party.