Take a look at this column by National Journal's Jonathan Rauch, for me one of the two or three most consistently interesting writers on American public policy:
The Democrats' postwar narrative was Keynesianism: By managing demand, the government would balance the economy instead of the budget. Reagan's narrative was supply-side: He would reignite stagnating productivity by reducing tax rates, deregulating, and shrinking a bloated public sector. Bill Clinton preached fiscal responsibility and globalization, a program that succeeded economically but lacked staying power politically, partly because Al Gore seemed to repudiate it.
Bush adopted the supply-side story, but in a primitive form in which tax cuts, deregulation, and smaller government became tax cuts, tax cuts, and tax cuts. The public has responded with something between indifference and contempt, leaving Republicans without a leg to stand on.
As for the Democrats, they have an audience. For the first time since the Great Society era, the public is receptive to a Democratic prosperity narrative, even eager for one. What the party does not have, yet, is the narrative.
Various bits and pieces are in circulation. Fix health care. Improve income security. Restrict trade. Raise taxes on the rich. Democrats hope to speak to middle-class America's feelings of economic vulnerability, which is probably the right tree to bark up. But while some Democrats strike notes of class resentment, others seem to blame foreigners. No candidate has found a package and a tone that tell a story not primarily about populism or nationalism but about prosperity: raising the tide to lift all boats.
Read the whole column here (the link expires in a week).