Starting with the Carter Administration, deregulation reigned in transportation, communications, and--eventually--energy. These victories for market-oriented policies stimulated growth and allowed us to have the luxury of an enlarged welfare state without crippling the economy.
"Crippled"? By historical standards, the U.S. economy in the 1970's was fantastically rich. And how much growth can we really attribute to deregulation of a few percent of GDP? The U.S. economy could easily have continued with the policies of the '70's, Nixonian controls and all, and look about as good as the French economy does today.
What I would say (and Tyler seems to be saying) is that libertarians currently lack a rallying point. From the 1930's through the Nixon Administration price controls, the forces of central planning were on the march, and libertarians had an important mission to fight them. But that fight has been won.
I'm puzzled. At least after World War II, opposition to hard-core central planning was standard among not only conservatives, but moderate liberals. Libertarians were unique precisely because they went further by opposing the "Third Way" of the welfare state.
Thus, if libertarians' were right back in the '70's, then they still have an "important mission" - rolling back the welfare state. In fact, this mission is especially important for libertarians to carry on because - unlike stopping central planning - almost no one else wants to work for it.