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I think we can finally dispense with the talk of 2008 being another 2006 for Democrats.

This hasn’t shown up in the national numbers, or likely will for weeks. I get the sense that right now is the time to sell the contract on Democrats winning the White House on Intrade. (Technical analysis alone would suggest this — check out the hockey stick-like buying pattern.) That isn’t to say they won’t win — but 63 will probably be their high water mark for quite some time.

This is not a call for celebration. We are still laboring against a significant enthusiasm gap and an unpopular war. But a few important indicators suggest we may have found a bottom. For a party that hasn’t been on the upswing since January 2005 and has been in virtual freefall since Katrina, that is something.

These are the vectors I see converging on this conclusion:

Iraq: We have had many false positives in Iraq. But this time the good news is accompanied by an actual change in strategy. For all the impatience with the war, the American people have been responsive to short term improvements on the ground. Even before this week’s relatively euphoric coverage, the “are we winning” numbers were going up off only spotty indicators the surge was working.

There is a constituency for victory. It’s may not be a majority, but between the 30th and 50th percentiles of support for the war there seems to be a strong willingness to stick it out if the strategy seems to be working.

If things stay as they are or even improve, we may be headed back to something resembling an even split on Iraq, depending on where the Republican candidate can credibly draw the line. I don’t think things will ever be seen as going well, but just being removed from the pre-surge fever pitch of “bring them home now” will help.

But most critical is Hillary’s positioning. Secure in her victory, she is giving up her anti-war positioning. I think that is a big mistake. She is calculating that a President must be measured and reasonable on issues of war and peace. That’s probably right. But how does she cope with the decidedly unmeasured feelings towards the war of not just her base, but anti-war moderates? How does she act as a plausible Commander-in-Chief while at the same time creating a mandate for herself as a decisive change agent? If she looks like Kerry 2.0 — calculating and unremorseful about her 2002 vote — doesn’t she just look like more of the same to anti-war swing voters? Couldn’t Romney, who seems to be leaving himself some space here, come in with a competence/change message? With Iraq looking better, and Hillary narrowing the differences, Democrats could be surrendering Iraq as a ballot issue.

SCHIP: This is not an obvious one, but Gallup says Americans agree with us on the policy. Framing-wise, this is still a loser (”GOP against health care for kids.”) But that would hold in virtually any political climate. This isn’t exactly the first time we’ve been attacked like this.

What’s different is that we’ve had some counterintuitive poll results showing the public rejecting new Democratic entitlements, especially when means-testing is loose to non-existent. The Hillary baby-bond idea flopped (this surprised me). And the public pretty explicitly wants SCHIP kept at 200% of poverty. The common thread: no new entitlements. If Democrats can’t move the needle on their core domestic issues, then what?

Even through the worst of it, the public stayed pretty conservative on entitlements and spending. The problem is that were in no position to exploit this winning position. Now we are.

MA-5: No, we shouldn’t read overarching national implications into this. But if the “wave” were still in force, it would never have been this close. In fact, the only race that was remotely like this in 2006, with an unknown Republican sneaking up on a heavily favored Democrat, was IN-7, and only because Julia Carson likes to consult the position of Jupiter before making staffing decisions. That was one race out of 435. This was one out of two or three specials this year.

This doesn’t signal a pro-GOP wave so much as a reversion to the norm. Candidates who run races like Ogonowski did should be competitive, even in blue districts. Guys who run as brilliantly as Michael Steele did should win, even in Maryland, and Rick Santorum shouldn’t lose by 20 points. The fact that we’re competitive right out of the gate in NM-SEN and CO-SEN, and holding steady in MN-SEN and OR-SEN, suggests a more normal political environment. 2006 was a killing field. 2007-8 is not.

You Don’t Get Two: Expanding this point, history is not on the side of repeat waves. Republicans thought 1996 would be another wave until the government shutdown in November ‘95. 1982 was not another wave. The classic example of hubris after first winning a Congressional majority was 1948.

Moreover, it’s difficult to produce a wave in a Presidential year. 1980 and 1932 are practically the only ones. In 1992, the Republicans gained ten seats. More voters, more indifferent voters, and more voters focused almost exclusively on a close Presidential election weighs down the electorate, making it harder to produce dramatic upsets down-ticket.

The House vote in Presidential and non-Presidential years makes the point. The Congressional ballot swings around a lot more in midterms. 1992 is the exception that proves the rule. That was the last election before the 1994 realignment.

Midterms
2006 52.2 - 44.3 D ( 7.9 D)
2002 49.6 - 45.0 R ( 4.6 R)
1998 48.0 - 47.1 R ( 0.9 R)
1994 50.0 - 44.0 R ( 6.0 R)

Presidential
2004 49.2 - 46.6 R ( 2.6 R)
2000 47.3 - 47.0 R ( 0.3 R)
1996 48.1 - 47.8 D ( 0.3 D)
1992 49.1 - 44.4 D ( 4.7 D)

The takeaway: a close Presidential election creates a vortex in which it’s difficult to talk of one party having a decisive advantage at any level. The narrative next year is more likely to be: “close, vicious Hillary vs. Rudy/Romney battle” over “another Democratic blowout.” If the national environment does improve somewhat, and the nominee starts close to slightly behind, we won’t have the steady demoralizing drumbeat we had in 2006. Rank-and-file Republicans will be too focused on beating up Hillary. Democrats in red districts could be cross-pressured.

No Bush to Kick Around Anymore: 2006 was the last year in which a Democrat could effectively run against Bush. It is not possible to do more political damage to Bush. People know he’s leaving.

Is this a case for 2008 as a Republican year? Not yet. But the Democrats’ best-case scenario is probably a muted change election like 2000 or 1976.