If politics were football, then I would say that the Clinton and Bush years saw little forward progress for either side. Clinton might have moved the ball toward the progressives' goal line, but only a few yards. I would say the same about President Bush--he moved the ball a few yards in the direction of the progressives' goal line.
I would not necessarily extrapolate the recent past into the future. My concern is that in 2009 the progressives will pick up really big yardage. In that case, the state will take another quantum leap in size.
I recently chatted with Cato's Tom Palmer about this, and he disagreed with my view of the Clinton Administration. Citing welfare reform and NAFTA, he argued that Clinton actually moved the ball a few yards in a libertarian direction.
My larger point, though, is this: assume that it is a foregone conclusion that the Republicans will be defeated, perhaps badly, in 2008. In that case, there will be important internal fights within the Democratic party, with many economists on one side and many party activists on the other. The essay describes the issues that will be affected by this division.