It’s a tad early for Democrats to be measuring the curtains at the White House, but there’s a palpable sense of opportunity in Washington among the party’s fervent but long-frustrated adherents. With 18 months to the presidential election, and Republicans mired in an unpopular war and labouring under an unpopular president, the Democrats surely have their best shot at winning back the White House since Bill Clinton emerged from the obscurity of Arkansas more than 15 years ago.

Most of the world’s attention is on what the Democrats would do about Iraq and foreign policy in general. But much can happen between now and November 2008 that makes speculation about policy for a turbulent region and a volatile world slightly pointless.

More interesting in many ways, and somewhat easier to think about, is what a Democrat president would do in the field of economic policy and what impact it would have on the global economy. While Democrats surely would try to heal some of the diplomatic rifts that have emerged in the past six years between the United States and much of the world, there are understandable concerns about what they would do for the global economy.

The party has shifted in a distinctly protectionist direction since it last held the White House. Its union backers have succeeded in forcing Democrats to focus on the losses from globalisation rather than the gains. Domestically, Democrats are inclined to push back against the tidal wave of deregulation over the past 25 years.

Of course, Democrats have long been sceptical about the benefits of free markets, but Democrat administrations have not necessarily proved to be antimarket in practice. True, in the 1970s, Jimmy Carter was an unmitigated economic disaster from start to mercifully early finish, but he was in many ways simply following the interfering consensus of the times – well-established, it must be said, by that staunch Republican Richard Nixon.

Mr Clinton, in contrast, may have been notoriously ill-disciplined in his personal life and poll-driven in too much of his politics, but in economic terms he was the very model of a responsible politician.

In his first term in office, against the overwhelming opposition of his own party, he supported the completion of the GATT trade round and the establishment of the World Trade Organisation, the North America Free Trade Agreement and the most far-reaching reform of welfare policy since the New Deal.

In the process Mr Clinton demonstrated that, with a certain amount of political backbone, the right personnel in important positions and a nose for compromise when necessary, even a Democrat can buck the trend of antimarket sentiment.

Mr Clinton surrounded himself with wise heads who pushed his party in the right direction. He made Robert Rubin, the former Goldman Sachs chief, his chief economic aide and later his Treasury Secretary. Larry Summers, the academic economist, succeeded Mr Rubin at the Treasury. And Mr Clinton was also wise enough to reappoint Alan Greenspan as Chairman of the Federal Reserve, even though he was a Republican.

The Clinton team also knew how to reach occasionally messy compromises with their opponents in their own part in pursuit of a bigger goal. The Nafta debate is a prime example. Mr Rubin told me recently that half the bridges in America should be called “Nafta” because it passed through Congress in part at least because of a massive public works programme in the districts of key members who were persuaded to vote for it. So a Democrat, if he or she is inclined, can produce business-friendly outcomes.

But are the current crop of presidential contenders so inclined?

Here the news is discouraging. No one in the front ranks of the Democratic party today is willing to confront the rising tide of antimarket sentiment.

John Edwards, the former North Carolina senator and once a committed “New Democrat”, is running a nakedly populist campaign. When it was announced in April that Toyota had overtaken General Motors in car and lorry sales, Mr Edwards denounced the Japanese company’s success and suggested it was all to do with unfair trade practices.

Barack Obama, the Illinois senator, for all his talk of a “new politics”, has been reluctant to take on the protectionist wing of his party. On his one big economics vote in his short Senate career he voted against the Central American Free Trade Agreement.

Even Hillary Clinton, the wife of the aforementioned market-supporting president, has made clear that she departs from her husband’s approach in this area. She has been one of the leading critics in the past few years of China’s so-called manipulation of its currency.

So is the brief era of a pro-free trade and pro-markets Democratic Party over? Unfortunately, the answer is probably yes. Mrs Clinton and Mr Obama would presumably resist the wilder demands of their Democrat friends and a Democratic administration would still include a number of sensible economic policy types.

A couple of weeks ago one man who may figure prominently in any future administration, Tim Geithner, the president of the New York Federal Reserve, a key member of the Clinton Treasury team in the 1990s, offered a forceful defence of open markets and global economic integration.

But the going is much tougher now in America. Rising inequality, the pain of jobs lost to the emerging markets of Asia and gathering insecurity about the financial future mean the next Democrat president is not going to waste much time protecting the freedom of modern capitalism.

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