The Democratic Party was not really ready for this. Democrats have been in the wilderness so long–since Ronald Reagan launched the conservative era twenty-five years ago–that older liberals began to think it was a life sentence. Bill Clinton was the party’s rock star; he made people feel good (and occasionally cringe), but he governed in idiosyncratic ways that accommodated the right and favored small gestures over big ideas. The party adopted his risk-averse style. Its substantive meaning and political strength deteriorated further.

Then George W. Bush came along as the ultimate nightmare–even more destructive of government and utterly oblivious to the consequences.

The 2006 election closed out the conservative era with the voters’ blast of rejection. Democrats are liberated again to become–what? Something new and presumably better, maybe even a coherent party.

This is the political watershed everyone senses. The conservative order has ended, basically because it didn’t work–did not produce general well-being. People saw that conservatives had no serious intention of creating smaller government. They were too busy delivering boodle and redistributing income and wealth from the many to the few. Plus, Republicans got the country into a bad war, as liberals had decades before.

On the morning after, my 6-year-old grandson was watching TV as he got ready for school. He saw one of those national electoral maps in which blue states wiped away red states. “Water takes fire,” he said. Water nourishes, fire destroys. How astute is that? It could be the theme for our new politics.

With Democrats in charge of the House and the Senate, we can now return to a reality-based politics that nourishes rather than destroys. The party’s preoccupation with “message” should take a back seat to “substance”–addressing the huge backlog of disorders and injuries produced by conservative governance. This changeover will be long and arduous. But at least it can now begin.

Republicans lost, but their ideological assumptions are deeply embedded in government, the economy and the social order. Many Democrats have internalized those assumptions, others are afraid to challenge them. It will take years, under the best circumstances, for Democrats to recover nerve and principle and imagination–if they do.

But this is a promising new landscape. Citizens said they want change. Getting out of Iraq comes first, but economic reform is close behind: the deteriorating middle class, globalization and its damaging impact on jobs and wages, corporate excesses and social abuses, the corruption of politics. Democrats ran on these issues, and voters chose them.

The killer question: Do Democrats stick with comfortable Washington routines or make a new alliance with the people who just elected them? Progressives can play an influential role as ankle-biting enforcers. They then have to get up close and personal with Democrats. Explain that evasive, empty gestures won’t cut it anymore. Remind the party that it is vulnerable to similar retribution from voters as long as most Americans don’t have a clue about what Democrats stand for.

The first order of business is taking down Bush. The second front is the fight within the Democratic Party over its soul and sense of direction. These are obviously intertwined, but let’s start with Bush and how Democrats can contain his ebbing powers. This is not a philosophical discussion. Events are already moving rapidly.

Everyone talks up postelection bipartisanship, and voters are weary of partisan cat fights. But that doesn’t mean selling them out to get along with the other party. If Bush wants compromise, let him start by promising not to nominate any more hard-right-wingers to the federal judiciary. Harry Reid, the new Senate majority leader, could respond by promising not to confirm any nominees if Bush doesn’t keep his word.

The tables are turned now. Democrats will control the pursestrings of government. Beyond keeping post offices open, they can kill anything Bush proposes. They have the high ground, but they can now also be blamed for what goes wrong. For the first time in a dozen years, Democrats have the power to alter the governing fundamentals.

Ending the war cannot be compromised. Voters want out “now,” as soon as possible. They did not endorse a couple more years of US occupation, many more lost lives and wasted billions. If Democratic leaders get that wrong, it becomes their war too, and Americans will not be forgiving. A coherent alternative that deserves bipartisan support may emerge from the Baker-Hamilton group. But, if not, Democrats should be principled critics and draw up their own road map.

Let Iraqis decide their own fate. Telling them to split up into three parts sounds like more colonialist intervention. Iraqis are robbed of true sovereignty as long as occupying Americans are present. Democrats can come up with a plausible timetable for withdrawal, accompanied by rational foreign-policy steps like direct talks with Iran and other Middle Eastern powers to defuse the sectarian violence and to arrange a manageable exit for the US military.

Congress cannot command troops, but it has enormous leverage to coax and prod Pentagon policy through appropriations and other legislation. Cutting off funds in the midst of war is not going to happen–it never has in US history–but the military itself could become a valuable source of strategic ideas, both in hearings and through back-door communications. Bush’s promised “victory” in Iraq is not an option.

The Pentagon, in fact, is especially vulnerable to Congressional pressure, because its spending is scandalously out of control. Rumsfeld allowed it, and the services took advantage of his open checkbook. Emergency “war” spending is headed toward $507 billion and covers numerous projects with no relevance to Iraq or Afghanistan. House and Senate committees can force out the facts and expose this outrage now. If they don’t, it will haunt them later when they try to reduce federal deficits.

When Democrats take up their commitment to reducing Bush’s budget deficits, they face a big problem up front. The economy is heading toward recession. Shrinking federal deficits would only make things worse. Dems need to back off that pledge and consider stimulative spending instead.

They can look for money elsewhere. One promising source lies in the many investigations and hearings Senate and House committees are planning to expose war-profiteering–Halliburton’s no-bid contracts, obscene subsidies and tax breaks for Big Oil and Big Pharma, the rank corruption that has essentially looted government programs. Properly managed, these inquiries can produce popular anger and demands for recovering the public capital carried off by private interests.

The straightforward way to achieve this is taxation. For three decades, Washington has been cutting taxes for corporate and financial interests, not to mention the wealthy. Democrats have to find ways to stop intoning this conservative tax-cutting mantra by showing that government has been robbed and ordinary families are the losers. Will voters be upset that Democrats are recovering public money by raising taxes on the plunderers? I think they will cheer.

Representative Charles Rangel, the next chair of the House Ways and Means Committee, has said he will not attempt to repeal Bush’s outrageous tax cuts for the wealthy–but instead let them expire in 2010. That kills estate-tax repeal and puts other measures in terminal jeopardy. Democrats should go on the offense and develop a tax-shift strategy that increases taxes on corporations and capital in order to finance tax relief for struggling families, middle-class and below. Last-Ditch Bush may veto this, but let’s see how many nervous Republicans vote against it.

All this depends, however, on the question of whether Democrats have the stomach for a fight, not only with Bush and the GOP but with the business and financial interests that underwrite both parties. We don’t know yet, but a test case may come soon. Corporate leaders, investment bankers and the insurance industry are lobbying to gut the modest regulations enacted after Enron and to disable investor lawsuits against fraud on Wall Street and in corporate boardrooms.

Which side will Democrats be on? In the 1990s leading senators supported big money against the interests of injured investors, including pension funds. Deviating Democrats included Chris Dodd, Joe Lieberman, Charles Schumer and Joe Biden, to name a few. If they are on the wrong side this time, voters should hear about it.

This tension between liberal economic values and the center-right economics of Clinton is the party’s great divide. Clintonistas-in-waiting–awaiting Hillary’s White House–still dominate party affairs in Washington. But the facts have changed. Voters expressed their contempt for Republicans in 2006. They did not suggest they want the same behavior from Democrats.

Is the new Congress reflected in economic populists like Senator-elect Jim Webb of Virginia and free-trade critics like Senator-elect Sherrod Brown? Or pro-gun, antiabortion conservatives from the South and Midwest who might pull the party rightward? Both before and after the election, major media, led by the New York Times and Washington Post, repeatedly emphasized that no leftward ideological shift would occur, because Democrats are moving rightward. This was bogus, way too simplistic. It overlooked the fact that 100 or more candidates ran aggressively on liberal or populist economic issues–against unregulated free trade and the offshoring of American jobs, against special interests, corporate excesses and social abuses. The Blue Dog and New Democrat caucuses will expand, but the Progressive Caucus will, too, and will remain the largest–at seventy-one members.

The spin originated with DLC types, and a principal source was Representative Rahm Emanuel, chair of the Democratic Congressional Campaign Committee, who recruited many of the candidates. “Emanuel and other top Democrats told their members they cannot allow the party’s liberal wing to dominate the agenda next year,” the Post reported. If Speaker Nancy Pelosi intends to be in charge, she might not want Representative Emanuel standing at her back.

The party’s ideological debate is under way privately at a more serious level. Robert Rubin, the influential former Treasury Secretary and executive chair at Citigroup, launched the Hamilton Project this past spring to head off the rising rebellion within party ranks against corporate-led globalization. He is proposing various measures, but holds fast to “free market” principle: Don’t interfere with the global markets and multinationals.

Organized labor has taken up Rubin’s invitation to talk and is countering with its ideas for fundamental reforms. Labor leaders do not expect to change Rubin’s mind. Their objective is to show Democratic incumbents that they are caught in a serious bind–between their injured voters and multinational investment bankers. Democrats will have nothing meaningful to say to them as long as the party adheres to the economic orthodoxy. They need debate and an aggressive agenda that stanches the bleeding for Americans and saves the global system by reforming it.

Nancy Pelosi has the power to break through the risk-averse habits. She and liberal allies like Representative George Miller are playing shrewd, not reckless politics. But the Democrats don’t have forever to establish bona fides with the electorate. A year from now, if the party looks like the same old timid crowd, Democrats will be in trouble of their own making.

This is where activists can develop influence inside Congress. They have to work on persuading Pelosi, Reid and key House and Senate chairs to take the larger risks. The breadth of the Democratic victory gives them license to push a more ambitious agenda. The weak public regard for Democrats gives them an incentive. The House-Senate majorities enable the party to pass a lot of urgent progressive reforms–regulating global warming, for example–that may not become law but would create forward momentum and draw “nay” votes from reactionary Republicans.

Progressives must develop an inside-outside strategy that engages this new Democratic Congress intimately while it rallies citizens at large to add their voices, too. This is going to be a hard, long struggle. Turning around a political party and politics isn’t accomplished in one or two election cycles.

But some newly elected Democrats found a smart formula in 2006. Talk to people about their lives and really listen to what people, not polls, say. Then offer solutions, not just rhetoric, that might work. If they learn to do this conscientiously, pretty soon Democrats might begin sounding like a political party.