There are three possible reasons for the Democrats' dominance in the last two elections. It is important to identify which is correct because future elections will hinge on an accurate assessment. I've gone over these before but it is worth a new look.
The country moved to the left.
This is the Democrats' favorite explanation - that the voters are demanding a more progressive government. If true then it means that the Republicans must either follow the Democrats to the left in search of moderate voters or doom itself to permanent minority party status. Either way, the Democrats win since they will be able to advance their agenda.
If this is true then the Republicans have to abandon Reaganomics and embrace Obamanomics. They need to recruit centrist candidates who will work with Obama.
The country was sick of Bush and corrupt Republicans.
Starting with Hurricane Katrina, Bush's approval rating started dropping and never really recovered. At the same time, several Republicans were implicated in sex and money scandals. The voters turned the scoundrels out, not caring much about who repalced them. This is the Republicans' favorite explanation since it means that the voters will soon tire of the Democrats and start electing Republicans again. There is some historic justification for this since the opposition party usually makes gains during mid-term elections. The mid-term election in the sitting president's second term is usually brutal to his party and this is when the Democrats started winning. A bad economy also hurts the party in charge.
If this is true then the Republicans just need to run strong candidates and wait for the voters to return to them.
The Republicans lost their way.
There is currently a split between conservatives and Republicans. The GOP is interested in running anyone who looks like a strong candidate. The conservatives want ideological purity. They say that part of the reason that voters rejected Bush and the Republicans in 2006 and 2008 is that they didn't stand for anything. The corruption and scandals were part of the problem. This group says that the Republicans need to clearly define themselves as being different that the Democrats instead of a slightly more moderate version. Their battle cry is "A choice, not an echo." The Tea Party protests are a manifestation of this as is the debate about Glenn Beck being good or bad for the Republicans.
If this is true then the Republicans still have a lot of work to do. They can't simply wait for the voters to return to them. They will have to earn the voter's trust. This is the hardest of the three but the rewards are greater. The Democrats took the second path, running moderates and waiting for the voters to come to them. The result is that they have a majority in Congress but not the ideological purity to enact sweeping changes.
The truth is probably somewhere between the second and third points. There is little evidence that the country made a major, permanent shift to the left. Democrats in 2006 and 2008 included conservative principles such as a balanced budget in their platforms. The 2008 election was mainly about the economy and the Iraq war. Universal Health Care was a side-issue and what is being proposed today is quite different from what Obama proposed a year ago.
That said, the nation still does not trust the Republicans. There is a vacuum of power at the top with no articulate leaders. This gives talk radio hosts and columnists more influence than they should have. Republicans hope to profit from the Tea Party movement but, after a multi-year spending binge under Bush, it is hard for them to portray themselves as champions of fiscal restraint.
At the same time, Obama may turn into a drag on the ticket. In the Virginia governor's race, Bob McDonnell, the Republican is comfortably ahead. Creigh Deeds, the Democrat, is blaming Obama and the Congressional Democrats. The White House is trying to counter this impression and is blaming Deeds for being a bad candidate. Now that the Democrats control Congress, they are the ones being implicated in scandals.
The voters are disillusioned with Obama and the Democrats but the Republicans need to offer more than a return to the Bush years to close the deal.
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