Will you recognize me
Call my name or walk on by
Rain keeps falling, rain keeps falling
Down, down, down, down
--Simple Minds
These pages have discussed the hijacking of the word 'liberal' by progressives (e.g., here, here, here). Nice analysis here by GMU econ prof Dan Klein of the evolution of the word using Google's ngram tool.
A simple ngram of 'liberal' reveals that usage of the word nearly quadrupled in the late 1700s. Klein links this pattern with the development of political and economic meanings of the word put forth by authors such as Locke and Smith. In this context, liberal was clearly associated with concepts of freedom and liberty.
The ngram then indicates that usage of the word liberal declined somewhat in the 1800s only to pick up again in the 1900s. Klein connects the second wave to the collectivist, statist movement which was becoming popular by the turn of the 20th century. Klein's 1894 quote of a Fabian socialist ("Laissez-faire individualist political philosophy is dead") helps capture the sentiment.
Because people still remembered what liberalism had been, progressives invented the term 'new liberalism' to reflect socialistic reform.
As memories of 'old liberalism' faded, progressives were able to clip the off the 'new.' And voila, liberal joined the stable of a positive substitute symbols that have become embedded in the American mind.
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