Good point on monetarism. While it did lower inflation, it did lead to a recession that hurt Reagan quite a bit. Then again, it had to be done to ensure long-term economic growth.
In regards to the Democratic Primary, I think that Kennedy would be quite hard to beat if he ran a better campaign than in OTL. But if he makes the same mistakes then Mondale is the major benefactor. He can swoop in and take much of Ted's labor and minority support. But he would be a much worse candidate in the general, because he has the charisma of a lump of gray clay. Quite frankly, Fritz Mondale would have a hard time ever winning the White House.