Hillary Clinton confessed to a "big sigh of a relief" when she won Iowa's Democratic caucuses by only a whisker over U.S. Senator Bernie Sanders last week. She's expected to lose outright to him in New Hampshire tomorrow.

That's not the script most Democrats anticipated, so one result is that Nervous Nellies in the party are doing what Nervous Nellies do: disappearing down a rabbit hole of "what ifs?"

A panicky Democratic backer, billionaire businessman Bill Bartmann, has tried in the last few days to revive the "draft Biden" movement hoping the vice president will change his mind and suit up for the campaign.

Imagine: A billionaire scheming to derail the party's anti-billionaire candidate by elbowing aside the first woman to have a really decent shot at the presidency.

It will sound like an especially bad idea to those who consider that Clinton's still the safest bet to win the nomination; she's just hit a rough patch in the early states.

Clinton, right, walks with New Hampshire state Senator Lou D'Allesandro as they knock on doors to greet voters on Feb. 6, 2016 in Manchester, N.H. (Justin Sullivan/Getty Images)

Polling mavens expect her to straighten out the skid in a couple of weeks when the race moves to the southern states where the higher number of non-white voters should give her a substantial edge.

Plus, she's already won the so-called "invisible primary" among the all-important "establishment Democrats" whose endorsements she's been racking up for a couple of years.

But this focus on the horse race is a distraction; it misses the forest for the trees.

Bringing 'progressive' back

The truly interesting thing about the Democrats is that the party and Clinton appear to be turning the page on their long history.

Last week in the Sanders/Clinton debate on MSNBC, the moderators stood back and let the candidates have at it on what makes a progressive in 2016.

"Progressive" is the euphemism for what we called "liberal" before conservatives made it a dirty word. The debate about who is and who isn't one is an old argument among Democrats.

Sanders said Clinton is a weak progressive because she takes Wall Street money, voted for George W. Bush's Iraq invasion, has supported international trade agreements and would make only modest changes to Obamacare.

Clinton said that the Sanders standard for being a progressive is impossibly high and uncompromising. She says she's a progressive "who gets things done."

Bernie Sanders speaks at the New Hampshire Democratic Party's 2016 McIntyre Shaheen 100 Club Celebration on Feb. 5, 2016 in Manchester, N.H. Sanders has called Clinton a weak progressive, suggesting her loyalties are coloured by reliance on big corporate donors. (Andrew Burton/Getty Images)

More than a few political watchers have pointed out that the amazing thing about this argument is that it's happening at all; as old as it is, it hasn't been publicly aired for a long time.

The last unabashed "great liberal" in the White house was president Lyndon Johnson who believed that government existed to do things.

The Johnson administration delivered legislation on civil rights, voting rights, mass transportation, housing, education, social security and on and on. He had a vision and the vision had a name: The Great Society.

Johnson's remained the defining presidency for America in the 1960s and 70s — through Richard Nixon, Gerald Ford and Jimmy Carter— until Ronald Reagan arrived to announce that "Government is not the solution to our problem, government is the problem."

Historians will forever argue about whether Reagan was more talk than walk, but he undoubtedly changed the conversation about the appropriate role of government.

Democrats have shied away from being perceived as the party of big government since Republican president Ronald Reagan announced, “Government is not the solution to our problem, government is the problem.” (Hulton Archive/Getty Images)

Democrats were shut out of the White House for 12 years.

When Bill Clinton finally got them back inside he didn't break with the Reagan code but instead ratified it as the new orthodoxy: "The era of big government is over," he said.

Historian Michael Beschloss called it "a skywritten acknowledgment" by a naturally "big government" liberal "that the Age of Reagan was so overwhelming that even a Democratic president had to work within its limits."

Barack Obama carried on like Clinton. He was prepared to negotiate the shrinking of government. His signature social policy, the Affordable Care Act, was a brainchild of Republicans and first tested in Massachusetts by then governor Mitt Romney.

That's the page Democrats appear to be turning now.

There is some irony that it's Hillary Clinton doing the page turning given how deeply implicated she is in what came before.

But whether she's evolved to it on her own, been led to it, or forced to it doesn't matter.

Democrats, Republicans in need of re-brand

Both Democrats and Republicans are struggling to understand what's going on in the grassroots of their respective parties.

The Republicans are wrestling with the disappointments of middle aged white Americans. Democrats are trying to understand a new generation.

In both cases there is a frustration that the economy doesn't work for ordinary people anymore and that the country's priorities are disconnected from its needs.

A 27-year-old banker/poet who Tweets as @KStreetHipster synthesized some of it in a series of posts that included:

"Lots of work exists. There are endless things in need of improvement"

"Most of our jobs aren't for improving society"

"Instead our jobs are for enriching someone. Not a societal good, in and of itself, but a private good"

Lots of work exists. There are endless things in need of improvement. But jobs, those are far more scarce. A competitive resource. —@KStreetHipster

There's a whole society to improve. Crime and inequality and poverty and on and on, but (most of) our jobs aren't for improving society. —@KStreetHipster

Instead out jobs are (typically) *for* enriching someone. Not a societal good in and of itself, but a private good. —@KStreetHipster

She's not a Sanders supporter. Her Tweets are just what seems obvious to her about 2016 America.

In fact she has a kind of reverence for Clinton's long experience — calling her a "political lioness" — and possibly because Clinton, like Johnson, believes a progressive has to actually get things done.

Democrats should have seen this coming.

There were warnings of a "new left" in surprises like the election of the Clintons' pal Bill deBlasio as mayor of New York two years ago — he even swore his oath on the same Bible used by Franklin Delano Roosevelt, the father of big government — and in all the data describing the millennial generation's priorities, ambitions and ideals.

Perhaps that's the meaning of Bernie. He might not defeat Hillary Clinton, but he has helped her and many others see what's expected of Democrats in 2016.