This year, though, we're in a historically odd position. The Republican Party is still in stage (b), but to a smaller extent, the Democrats are back there too. The Democratic Party spent so long in stage (a) during the 90s, moving aggressively to the center after years in the wilderness, and the GOP moved so far to the right under Gingrich and Bush, that Democrats have the luxury of being able to move modestly to the left and yet still be moving relatively closer to the center than the Republican Party. On a scale of 1 to 10, it's like the GOP is moving right from 8 to 9 while the Democratic party is moving left from 4 to 3.5. The lunacy of the conservative base is providing a huge amount of cover for liberals to make some modest progress this year.
I dunno. I think it's important to talk specifics here. On a question like health care, all three major Democrats are running on similar platforms that are considerably more ambitious than what John Kerry or Al Gore offered. On the other hand, they're considerably less ambitious than what Bill Clinton proposed in 1993 or what Bob Kerrey proposed during the 1992 primary.
On the use of force, most congressional Democrats opposed the 1991 Persian Gulf War, taking a very skeptical view of the efficacy of American arms even when deployed in what was as close to a textbook instance of liberal internationalist collective security as the world has ever seen. By 1998, most Democrats were prepared to countenance the limited use of force with little-to-know risk to American lives against Serbia with the support of most of the UN Security Council's members but in the face of Chinese and Russian veto threats that made an authorizing resolution impossible. By 2003 you had the bulk of the party leadership prepared to endorse a preventive counter-proliferation war against Iraq that was all-but-uniformly opposed around the world. Here in 2008, things have clearly evolved back in a dovish direction from where they were during the Summer of War but you still don't see anyone ruling out unilateral air strikes against Iran.
What else? To me, that seems to generally be the pattern: Al Gore ran on a very timid platform in 2000, and 9/11 then sent Democrats into a years-long defensive crouch, but the point where the party's gotten back to is pretty similar to where it was when Bill Clinton first got elected. Insofar as the party's to the left of where Clinton was in at the end of his administration, that seems to mostly be because people are envisioning a Democratic congressional majority.