How did we go from something like 1940s era collectivism or 1960s era leftism to the current bizarro political machine that seems to have hypnotized a large portion (if not majority) of the country?

The prevailing economic wisdom after WWII was Keynesianism, which says that the government should increase government spending when unemployment is high and decrease it when inflation is high. What happened in the 70's and 80's was that the economy started experiencing both high unemployment and high inflation at the same time, "shrinkflation," which wasn't supposed to happen according to Keynesianism, and which it had no real response to. The reason it was happening (at least from a Marxist perspective) was that the US had already developed in the ways that saw the highest returns, and there simply wasn't as much new ground to cover - this is what's meant by "the tendency of the rate of profit to fall." Regardless, the government was faced with a decision of which problem to focus on between unemployment and inflation - and it chose inflation.

The phenomenon of shrinkflation started under Nixon, who attempted to fight it with price controls and taking us off the gold standard, which was perhaps the most anyone ever did. Ford had no idea what he was doing and just asked people to spend less.

And then we got Carter, and Carter does not get nearly enough hate for his role in this. Carter chose to confront inflation rather than unemployment, the real beginning of "supply side economics" that Reagan would take further. Carter's whole deal was "restoring the dignity of the office" after Watergate and his focus was on individual morality. His message was essentially, you're going to have less purchasing power, but it's ok because we can seek fulfillment in other ways, outside of the economic sphere. He marked the transformation of the Democratic party away from representing the interests of labor and towards the beast that it's become today, with it's obsession over norms and procedure and technocracy.

The result of Carter's messaging and policy was one of the greatest blowout losses in history against Ronald Reagan. Reagan would do all the same things as Carter, but he at least had the decency to lie about it. He focused on how much more you'd be able to afford with cheaper goods, conveniently ignoring the fact that with lower wages, purchasing power would actually decrease. However, thanks to the Democratic party completely abandoning labor and the common people, there was no real pushback against this, there was no alternative explanation or solution or criticism of the broad direction of policy. In fact, economic policy was moved out of the sphere of democratic accountability altogether by leaving it to the Federal Reserve to set interest rates. Instead, the culture war kicked off and that's what elections would be about from then on.

Why did the Democratic party abandon unions? Because the unions like the AFL/CIO stripped themselves of power and radicalism by purging communists during the Red Scare. The Carter administration didn't view labor vs capital in terms of the fundamental struggle of society but as just another set of competing interest groups and lobbyists, which is honestly pretty much how the unions saw themselves and wanted to be seen anyway.

So what happens when more and more important questions are taken out of the hands of the voters, who then watch conditions gradually decline? Well, the voters get mad about declining conditions - and at the same time, get dumber from not being engaged in any important questions. There's a sense that we can just fuck around and do whatever because our actions don't have consequences, because most of the time what we say and believe seems to have no real effect on policy anyway. Nobody gets to vote on whether or not to keep arming Israel and bombing Yemen or on whether to raise or lower interest rates or anything like that - the only thing we get to vote on is stuff like whether trans women can play sports.

Trump's popularity is very easy to understand in that context - he is a rebellion against that declining status quo and a desperate attempt to reassert the power of elected officials over technocratic institutions. Of course, since the left has been purged and is devoid of power, this rebellion can only come from the right. A similar thing happened in Iran (which Carter also fucked up btw but that's not important right now), where after being installed by the CIA, the shah hunted down and exterminated everyone on the left, and then conditions declined and people wanted change, only that change had to come from the right because the left was powerless. And if the American left can't materialize and offer an alternative vision, both to Trump and, more importantly, to the failed bipartisan status quo that existed before him, then we're headed towards the same future.