It might strike you as counterintuitive, but Democrats are prospering in the richest areas of the country, while Republicans are increasingly finding themselves beaten back into the Boonies. The Democratic strongholds of New York, New Jersey, Connecticut, and California have a high percentage of wealthy people, along with a high cost of living. And Democrats are doing increasingly well in the suburbs (see, e.g., the 2006 congressional races in the Philly metro area). Paul Krugman wonders whether the Democrats are being ‘wobbled by wealth’. Could this explain their failure to tax hedge fund managers at the normal income tax rate?

Maybe. But, for all my frustration with the current makeup of the Democratic Party, I am seeing the makings of an historic political realignment. Several factors could forestall or even derail this realignment, and I’ll be talking about those issues this fall and winter as we approach the presidential primaries. Let me lay out some of the signposts.

The first and most obvious sign of a realignment is seen in the nuts and bolts of the congressional campaigns. Breaking with all historical precedent, the Democrats are outraising the Republicans, and they are doing it at a mighty clip. The money advantage can be seen on the presidential level, where Democratic frontrunners Hillary Clinton and Barack Obama have a combined $86 million cash on hand compared with $25 million for Romney and Guiliani. This advantage is also reflected in the parties’ congressional and senatorial election committees. The DCCC has $28 million cash on hand compared to the NRCC’s $1.5 million. And the NRCC has almost $4 million in debt. The Senate situation isn’t much better, but at least the NRSC have a little money to spend: $8,302,427. The DSCC, after debts, has $20 million. This is a staggering differential. The Republicans’ have raised the bulk of their money for the Republican National Committee (RNC), which is primarily concerned with national elections and party building, and not specific races. The RNC has a $16 million to $1.2 million advantage (after debts) over Howard Dean’s DNC. The advantage isn’t entirely from differential fundraising though, as Dean’s 50 State Strategy has a very high burn rate. Overall, the DNC, DCCC, and DSCC have more than twice as much cash on hand as their Republican counterparts. This cash advantage is important both for its strategic value (the ability, or inability, to infuse close races with last second cash) and for its symbolic meaning. People are betting on the Democratic Party and they are investing in it…heavily.

A money advantage is not the end-all of political success, however. Candidates like Rick Santorum, George Allen, and Conrad Burns lost their seats last fall despite vastly outspending their opponents. Candidate recruitment is key. And, here, the Democratic advantage is as stark as their money advantage. The Republicans have recruited no one thought remotely capable of unseating any Democratic Senator in next year’s election, (except for a Louisiana Democrat that flipped parties to challenge Mary Landrieu). The Democrats will be able to use all their money on offense. And they will be on the offense challenging seats from Maine to Virginia to Kentucky to Oklahoma, Oregon and Alaska. Their recruitment in the House has been slightly better, and they will have some strong candidates challenging some of the seats the Democrats picked up in ’06 (see Chris Carney in Pennsylvania’s 10 District, e.g.). Yet, with a plethora of retirements, especially in the blue-leaning Midwest, the Republicans will be defending many open seats, and with less than no cash on hand from the NRCC to assist them.

So, just based on the mechanics of money and recruitment, the signs all point to big Democratic gains. But, as Krugman notes, there are other signs:

James Stimson, a political scientist who uses data from many polls to construct an index of the overall liberalism or conservatism of the electorate, finds that America is now more liberal than it has been since the early 1960s…

Democracy Corps asked those who believe America is on the wrong track to choose phrases that best described their views of what’s gone wrong. The most commonly chosen were “Big businesses get whatever they want in Washington” and “Leaders have forgotten the middle class.”

While Krugman laments the Democrats’ lack of response to this economic populism, I think it spells doom for the GOP. The Republican Party’s traditional strategy has been to pile up a large money advantage from Wall Street and tax-averse activists, and then run as anti-elitist defenders of everyday folks’ values. They’ve already lost the cash advantage, they’ve started to lose the tax-averse suburbs, and now the remainder…the rural middle class and poor, are blaming ‘Big Business’ for the country’s ills.

There are signs of erosion everywhere. We saw it last week in David Kirkpatrick’s huge piece: The Evangelical Crackup. We saw it AdNags piece on Saturday, where he observed:

The continued strength of Rudolph W. Giuliani, the former New York mayor who supports abortion rights and gay rights, is testing the question of whether social issues still drive Republican primary voters.

If Guiliani wins the Republican nomination American politics will enter a new phase. This can be summed up in two passages from Nagourneys’ article.

“The Republican Party is waiting for a nominee to voice a post-Bush vision for the party,” said Richard N. Bond, a former Republican National Committee chairman…

…Should Mr. Giuliani win the nomination, he would give the party a very different definition and face than the Southerners and evangelicals who have been ascendant until now.

Yet, how would the Republicans respond to an ethnic, lapsed Catholic, northeastern, urban leader in the face of more losses in Congress that creates a caucus more regionally isolated in the southern and plains states?

It would take at least one election cycle for the Republicans to rebrand and start to appeal to the suburbanites and moderates that once were their source of strength. A Guiliani general election victory is unlikely in any case. It is more likely that Guiliani’s positions on social issues and his personal corruption will be blamed for the historic losses, and a term of entrenchment will ensue.

Here is my short-term prediction:

The Democrats will win the White House. They will pick up House seats throughout the Midwest, including seats in Ohio, Michigan, Illinois, and Minnesota. There will be zero House reps left from New England, and the Dems will pick up seats in New Jersey and New York. The Republicans will lose Senate seats in blue states, plus Virginia, Colorado, and at least one or two other shocking areas…perhaps Kentucky, Tennessee, or Oklahoma.

The Republicans will wake up after election night and discover that they have almost ceased to exist on the coasts, in the upper midwest, and that they are vulnerable everywhere outside of the Deep South.

But, they will also find that there are no voices of moderation left. Their caucus will be more radical and socially conservative than it was before the elections. They will also be leaderless. The president will be gone. If Mitch McConnell does not go down to defeat he will still, certainly, lose his leadership position. John Boehner will certainly lose his leadership position, as well.

The exact size of the electoral defeat will be important. If the Democrats reach 60+ seats in the Senate, there will be no way for the Republicans to stop any bill that the Democrats remain united on. This would be the only way the country might see radical reforms like single-payer universal health care, public financing of elections, or a return of the Fairness Doctrine in media.

Smaller Democratic gains might lead to a more incremental approach. And there will still be many areas where the Republicans will be able to peel off conservative Democrats to forestall legislation.

Even as the Democrats retake their position as the majority party, there will be tensions. Economic populism will actually be most popular in the areas still controlled by the Republicans. How will the Republicans respond?

My guess is that, in the short-term, their response will be xenophobic, isolationist, and fascistic. But, at some point, economic moderates will reassert themselves and craft an appeal to the northeasterners, suburbanites, and upper classes that eschews southern culture and cultural conservatism. Whatever happens, it will be a long way back for the party of Lincoln.

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