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The term "progressive" is usefully used to describe the politics of social change outside of the framework of established power and the state.
Liberals, by contrast, are what the Libertarians might call "statist" in their attitudes toward social change and political power. Positive, but fundamentally oriented toward established power structures.
The basic distinguishing premise is that progressives, like their populist cousins, distrust the state, established institutions, and power elites. Liberals, by contrast, have a fundamental faith in those forces.
Thus progressives oppose "free" trade the WTO; liberals support it. Progressives called for Bush's impeachment and marched against the war in Iraq; liberals scorned the hippie losers and wrote about how we could all count on reasonable, responsible voices winning out in the end. Progressives tended to back Obama and the "50 state strategy;" liberals tended to support Clinton and felt that honing the traditional Democratic focus on swing states was the only safe route to victory.
Progressives, in other words, don't trust the system, while liberals keep saying (as much to themselves as anyone else) that this time, no really, it's all going to be good, we just have to give it some time.
At the same time, liberal values gave us Title IX, while if it had been up to them progressives would still be agitating and demonstrating in the streets one college campus at a time. Liberals have nursed and coaxed along a fragile coalition in the Senate, while progressives would have split the baby in two and left the Republicans in charge. Liberals gave us the EPA and continue the fight for the ERA. Liberals may not trust the netroots the way progressives do, but what progressives can't admit to themselves is that the jury is still way out on whether the netroots is going to matter in the long run.
In other words, there really is something to statecraft and institution-building, in addition to activism, and while they haven't been at their best these past 25 years liberals have a lot to show for their side of things.
So, yes, there is a significant difference in the two terms; yes, Michael Lind's not getting it is as demonstrative as one might wish of the reasons why; and, finally, yes, he certainly may call himself a liberal, since that's what he is — and here's to finally making something of it in 2009.