If you are talking about supposed player quality and ability as well as placements in the league, then they've been far worse than we are now.
If you talk about commitment to the cause and competitiveness in one-off games or derby matches, then no, they were never as bad as we are now.
Relativity is vital for a question such as this; and relative to the finances and players pumped into a squad, we are far, far worse because Liverpool had so many players who were laughably bad on paper, let alone over a league campaign that it was to be expected that they wouldn't compete for anything. By contrast, going by names on paper, we are massively underpeforming whilst paying one of the highest wage bills in football, not just the league.
In the 80's we had a greater underdog spirit than Liverpool despite them being top dogs; in the 90's and 00's, their underdogs always gave us, as top dogs, a game; the '10's saw the balance shift, and the '20's are seeing us wilt, or certainly not showing anything like the fire and commitment we had in the 80's.
So, 'bad' by league places and personnel, they were worse, but by any other metric, what we are now is worse than what they were.
If your players are at least willing to put in everything for these games, you can hold your head high, as you've let your rival know you're still a bastard to play against. When your players are wet tissues in these times, the misery is compounded.