Mental health policy arises out of the interaction of many different variables. These include (but are not limited to) the composition of the population of persons with severe mental illnesses; the means of dealing with disease and dependency; concepts of the etiology and nature of mental disorders; the organization and ideology of psychiatry; funding mechanisms; and existing popular, political, cultural, and professional values. But an often neglected but crucial factor in shaping policy is the very structure of the American political system, which played a crucial role in shaping mental health policy. Rather than emphasizing the neo-liberal theory and its accompanying hostility toward "unsuccessful" people and disdain of welfare, this article suggests that an understanding of mental health policy in the latter half of the twentieth century is better served by an examination of what actually happened. Theory, however attractive, rarely can encompass the messy data of reality.