For quit some time, “liberal” was a good word, particularly in the United States. Then things changed. From The Triumph and Collapse of Liberalism:
In the year 1951 no less a demagogue than Sen. Joseph McCarthy still used ‘liberal’ positively, at least on one occasion. In a speech he accused Gen. George C. Marshall and Secretary of State Dean Acheson of being part of ‘a conspiracy so immense as to dwarf any previous such venture in the history of man. A conspiracy of infamy so bleak that, when it is finally exposed, its principles shall be forever deserving of the maledictions of all liberal men.’ In that very year Sen. Robert A. Taft, idol of recent American conservatives, thought it necessary to state that he was not a conservative but ‘an old-fashioned liberal.’
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“Conservative” was a word (and a political idea) that Americans eschewed for a long time. During the 19th century much of the political history of Europe and, in particular, of Britain was marked by the debate between conservatives and liberals. In the United States that was not so.
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During the 19th century, liberalism, by and large, meant political and economic individualism, an emphasis on liberty even more than equality, a reduction and limitation of the powers of government. From the beginning of the 20th century, liberals, by and large, accepted and advocated the spread of equality, meaning more and more legislation and government bureaucracy to guarantee the welfare of entire populations. That kind of administrative intervention, with its occasional legislative and bureaucratic excesses, turned millions of Americans against “government” (though they were often the same Americans who were enthusiastic about the political and military powers of government).
Another source of the dislike of liberalism was anti-Communism. Just as the political advocacy of liberalism had moved closer to socialism, the ideology and foreign policy of liberals and Democrats often seemed (and were) more tolerant of Communism and the Soviet Union than were nonliberals and most Republicans. Liberals were, or seemed, less patriotic (more precisely, less nationalistic) than most Americans. And it is, of course, the viscous cement of nationalism that binds so many of the preferences and beliefs of masses of people together.