Robert Kuttner: Can someone reclaim American liberalism?

Three times in my political adulthood, we have seen the exhaustion of a conservative ideology and presidency. Under Presidents Nixon and Bush II, the ingredients were corruption, corporate excess, and overreach of presidential power. During the 12 years of Reagan and Bush I, the hallmark was the failure of conservative economics.

And twice, the electorate ousted Republicans only to get centrist Democrats, who ran more competent administrations but did little to redress the structure of financial inequality in America.

Now, the third era of conservative Republican rule is collapsing -- with the most spectacular mélange of overreach, incompetence, economic distress, and sheer corruption of all. But who, and what, will succeed Bush? The forces of privilege and inequality are now so deeply entrenched in America that it will take a Democratic successor at least as bold as FDR or LBJ to change course. When Nixon went down in 1974, Watergate was most remembered for its assaults on the Constitution, but it also involved corrupt favors for business allies, lubricated by satchels of $100 bills. Despite an abortive effort to rein in the influence of concentrated wealth in politics, the Supreme Court soon opened loopholes that allowed big money to dominate politics once again.

Nixon was succeeded by Jimmy Carter, the most conservative Democrat since Grover Cleveland. He was personally frugal, but his policies of deregulation helped widen inequality and insecurity in America. During the Carter era, business's counterattack on unions was already in high gear. Though he had a large working majority in Congress, Carter did not lift a finger to enact labor law reform, which failed by two votes in the Senate for lack of presidential interest. As a progressive who cared about inequality, Carter was far more admirable as ex-president than as president.

Clinton, who succeeded another exhausted 12-year run of conservatism, deserves credit for such programs as the earned income tax credit and an increased minimum wage, which raised earnings at the bottom. But Clinton only accelerated financial deregulation and promoted trade policies like NAFTA, which helped the very top pull away. Clinton also entrenched the notion of budget balance as economic virtue.

This week, I heard Nobel laureate Joseph Stiglitz, former chair of Clinton's Council of Economic Advisers, demolish the idea that budget balance was the source of the 1990s boom. Rather, it was increased productivity and declining interest rates, and a brief financial bubble. Stiglitz argues that America, then and now, needs a more progressive tax code, with new revenues spent not on budget balance but on neglected social needs that pay dividends in higher growth -- quality pre school, research and development, universal health care.

But Stiglitz is not running for president. Of those who are, it remains to be seen which, if any, would tackle the deeper sources of inequality and insecurity....