take the wind out of socialism's sails. Traditionalist and liberals alike were so afraid of socialism/communism gaining traction, that they implemented some of its policies to prevent people flocking to the left.

I'm not saying this to dismiss the racial angle (I think the current rise of ethnic nationalism is very much tied to the decline of the welfare state, for example), but if I'm not mistaken the US had a much weaker socialist/social-democrat presence throughout the 20th century, so that might account for the discrepancy as well.