In late January, for the third time since Barack Obama's historic election, a group of Washington, D.C., writers and think tankers, roughly half liberal and half libertarian, gathered for an evening of robust discussion and debate exploring a potential "liberaltarian" overlap in our new Democratic age. Fittingly, the event was held at the idiosyncratic-for-D.C. Tabard Inn, a charming hotel/restaurant that decades earlier was saved from the redevelopment wrecking ball by a coalition of mostly liberal stalwarts, including the old New Lefty Robert Scheer.

The exchange was cordial and vigorous, the lamb was divine, and after three stimulating hours I left more convinced than ever that any new "fusion" project between libertarians and liberals—at least where the rubber meets the road in government policy—is doomed.

In theory, I should be the ideal audience for this exercise. As I mentioned at the dinner, I have described myself as "liberal" (albeit using a definition that few Americans share) for far longer than I have let others describe me as "libertarian." I've spent much of this century bashing not just George W. Bush and John McCain but the mind-set among self-described libertarians who supported them. I'm even a longtime friend of and collaborator with Scheer. And in 2005, when Democrats were about as depressed as Republicans are this year, I wrote a series of articles urging the donkey party to shed its politically correct Northeastern liberalism for a Western, live-and-let-live libertarianism, embodied by Mountain West Democrats like Montana Gov. Brian Schweitzer. The idea attracted New York agents and publishers, and for a while there I was tempted to write a book-length description of this marvelous new liberaltarian jackalope.

In the end I opted out, partly due to the same sentiments magician Penn Jillette expressed to reason just before the November 2008 elections: "I believe in individual rights so much that I don't like any sort of 'what's good for the cause'–type question.…I'm even uncomfortable telling people who to vote for." But mostly, I never believed Democrats would embrace limited government principles for any purpose other than regaining power. Events have borne me out.

In the exile years of 2005–06, the lefty commentariat overflowed with examinations of three modern conservative milestones: the failed yet influential Barry Goldwater presidential campaign of 1964, Ronald Reagan's electorate-reshaping revolution of 1980, and the 1994 GOP uprising in the House of Representatives. In the HBO documentary Mr. Conservative, Goldwater's granddaughter Julie Anderson portrayed the Arizona legend as a sort of proto-liberal. The "values voters" who helped put Reagan over the top in 1980 became Democrats' most soughtafter voting bloc in the wake of John Kerry failing miserably among self-identified Christians (an error that was assiduously addressed by the Scripture-quoting, Rick Warren–wooing Obama in 2008). And the Gingrich Revolution in particular was mined as a source of inspiration—but for tactics and messaging, not ideas.

In February 2005, when minority Democrats stiffened in opposition to Bush's half-hearted Social Security privatization plan, Los Angeles Times political analyst Ronald Brownstein reported, "Those Democrats urging scorched-earth opposition to Bush's central proposals cite the relentless attacks by Gingrich…against the Democratic congressional majority through the early 1990s." After years of apologetic politics, Democrats were rising off the mat with a say-it-loud-say-it-proud attitude cribbed consciously from their opponents, in the service of keeping government big.

The poster child for this transplanted GOP attitude was the newly appointed Democratic Party chairman, Howard Dean, who claimed to champion "the Democratic wing of the Democratic party" (a phrase used to great effect in 2000 by Ralph Nader). In 2003 Dean had been the relatively obscure governor of Vermont, known for his surprising support of gun rights, military interventions, and fiscal conservatism. By 2004, after running as the anti-war candidate in the presidential primaries, Dean had moved much further to the left, even while boning up on the new-media successes of the Gingrich revolution. "We can learn a lot," he explained to Mother Jones in October 2004. "The question is, are we capable of that discipline? We know we need some more infrastructure. We need leadership institutes. We need media institutes where we can get our message out the way the Republicans do. But we mostly need to work together. That's what Republicans do and we don't."

For a brief time, this political crossdressing allowed for some experimentation on the ideas level as well. At the popular netroots website Daily Kos, Logan Ferree penned a lengthy and much-discussed "Left-Libertarian Manifesto" in May 2006. The catch: "The most heated disagreement comes in the area of economic issues." To the surprise of many, the basic idea was endorsed by site founder Markos Moulitsas. "It's no secret that I look to the Mountain West for the future of the Democratic Party," Moulitsas wrote, "people like Brian Schweitzer."

Sure enough, the Montana governor was the keynote speaker at the Democratic National Convention in 2008. But if you think Schweitzer used the opportunity to stress his libertarian Democrat bona fides—the tax cuts, the National Rifle Association endorsements, the oil drilling, the opposition to the Real ID Act—you probably weren't paying attention to Democratic politics between the summers of 2006 and 2008.

The party retook Congress in November 2006 not by railing against big government but by running against free trade, fielding more anti-abortion candidates in red states, and stressing Republican incompetence and corruption. By 2008, when the economy started tanking and Bush became a millstone, Dems positioned themselves still further to the economic left. Mountain West "libertarian Democrat" Bill Richardson, an ardent free-trader for much of his career, became an unconvincing NAFTA basher on the stump. Hillary Clinton ran against her own husband's "New Democrat" economic policies. By the time Schweitzer sidled up to the convention podium, any libertarian notion beyond refusing to torture U.S. citizens was going to be about as welcome as a nude calendar of Karl Rove. "Four billion in tax breaks for big oil?" he howled. "That's a lot of change, but it's not the change we need!" The crowd roared.

It is certainly no surprise that any party, let alone the Democrats, would want to use that fancy government once it held the awesome reins of power. Unified Republican governance this decade should disabuse even the most gullible from the notion that either of our two major parties is ever going to enact a small-government agenda, especially during a perceived crisis. But already during Obama's first 100 days we've seen how quickly liberals will turn against libertarians once they're no longer swinging at the same piñata.

During the debate over the $1 trillion stimulus package, for example, a remarkable academic fight broke out: Liberal fans of John Maynard Keynes, led by New York Times columnist Paul Krugman (a man whose Nobel Prize award last year was cheered by many libertarian economists), tried to airbrush free marketeers out of the debate. "They just don't read anything that doesn't come from their cult circle," Krugman wrote in one blog post; in another he called them "barbarians in the grip of an obscurantist faith." (For more on the false consensus of liberal economists, see Veronique de Rugy's "Stimulating Ourselves to Death," page 17, and Daniel M. Rothschild's "Whitewashing FDR," page 55.) The same liberal bloggers who complained for years about being called "unserious" by pro-war Republicans were using the same word to describe libertarian arguments against the bailout.

At the liberaltarian dinner, the discussion focused on campaign finance reform, and how the editor of the liberal American Prospect, Mark Schmitt, had gone from being a strong supporter of restrictions on political speech to being…a less strong supporter of restrictions on political speech. I asked how it was that someone who had discovered a First Amendment objection to campaign finance reform could maintain any enthusiasm at all for the project. "Look," he eventually said, "not all of us are going to be libertarians." True enough.

Matt Welch is editor in chief of reason.