The Republican Party is in trouble: In the wake of the presidential election, everybody has said so, and everybody is right. From there, however, a hundred paths diverge and a thousand voices have been heard. The relevant questions are these: How deep is the trouble? How much of it is self-inflicted and how much is a function of circumstance? Can the problem be repaired, and if so, by what means?

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By all rights, Barack Obama should have lost the 2012 election. The economy during his first term in office was weak from beginning to end. Growth was anemic when not utterly static, unemployment was persistently high, and, as recently as last year, an overwhelming majority of Americans still believed we were in a recession. The signature legislative achievements of the president’s first term—the Affordable Care Act and the stimulus package—were so unpopular that on last year’s campaign trail he rarely mentioned them.

Meanwhile, the Republican Party, which in 2010 had gained an epic midterm electoral victory, was regarded as highly energized and poised to win. Michael Barone, one of the most knowledgeable political observers in America, predicted Mitt Romney would comfortably defeat the president. “Fundamentals usually prevail in American elections,” Barone wrote four days before the election. “That’s bad news for Barack Obama.”

And yet Obama won going away, defeating Romney by 126 electoral votes (332 to Romney’s 206) and winning the popular vote by nearly 5 million. In the Senate, which many had thought likely to fall to Republican control, the GOP lost two seats; in the House, it managed to hold its majority, but at the loss of eight seats.

The 2012 election was not only a dismal showing for the Republicans but the continuation of a dismal, 20-year trend. Out of the last six presidential elections, four have gone to the Democratic nominee, at an average yield of 327 electoral votes to 210 for the Republican. During the preceding two decades, from 1968 to 1988, Republicans won five out of six elections, averaging 417 electoral votes to the Democrats’ 113. In three of those contests, the Democrats failed to muster even 50 electoral votes.

What is the reason for this swift and stunning reversal of electoral fortunes? The answer lies in a variety of factors—and in their confluence.

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The first factor is America’s changing demographics. Much has been written on this topic, but the essential datum is the long-term shrinking of those demographic groups, especially white voters, who traditionally and reliably favor the GOP: from 89 percent of the electorate in 1976 to 72 percent in 2012. This decline is partially an artifact of a change in the way the Census Bureau classifies Hispanics, who used to be counted among whites before being placed in a separate category. But it has much more to do with a real, ongoing change in the composition of the American populace. In any given contest, the GOP can overcome this obstacle. Over time, however, the obstacle will grow ever larger.

Consider the performance of Mitt Romney, who carried the white vote by 20 points. If the country’s demographic composition were still the same last year as it was in 2000, he would now be president. If it were still the same as it was in 1992, he would have won in a rout. If he had merely secured 42 percent of the Hispanic vote—rather than his pathetic 27 percent—Romney would have won the popular vote and carried Florida, Colorado, and New Mexico. Republicans, in short, have a winning message for an electorate that no longer exists.

Another factor lies in the realm of foreign policy. For four decades, our adversarial relationship with the Soviet Union was a major issue in presidential elections. Over that period, and particularly from the early 1970s to the late 1980s, Republicans were widely considered the stronger and more trustworthy party when it came to national defense and to keeping America safe. In every presidential election since the Nixon–Humphrey contest in 1968, Republicans began with a significant lead in this respect. With the end of the Cold War in 1989, this potent issue was largely taken off the table. Nor has the decidedly mixed legacy of the wars in Iraq and Afghanistan over the last decade worked to bolster the Republicans’ electoral advantage in the conduct of foreign policy; if anything, the opposite is the case.

Then there is the quality of the candidates fielded by the two sides. Democrats have nominated two candidates—Bill Clinton and Barack Obama—endowed with formidable political skills. The former is one of the most naturally gifted politicians in modern American history; the latter is one of the most ruthlessly efficient ones. Republican presidential candidates, in contrast, have sometimes shown a marked inability to connect with the concerns of working- and middle-class voters or to convince such voters that Republican policies will help improve their prospects in life. In some cases, the Republican agenda with respect to the middle-class electorate has been strikingly uncreative and tone-deaf. In 1996, for example, the GOP candidate, Senator Bob Dole, focused like a laser beam on the 10th Amendment and spoke glowingly of building a bridge…to the past.

And it is no wonder that Republican policies can seem stale; they are very nearly identical to those offered up by the party more than 30 years ago. For Republicans to design an agenda that applies to the conditions of 1980 is as if Ronald Reagan designed his agenda for conditions that existed in the Truman years.

To be clear: Reasonable tax rates and sound monetary policy remain important economic commitments. But America now confronts a series of challenges that have to do with globalization, stagnant wages, the loss of blue-collar jobs, exploding health-care and college costs, and the collapse of the culture of marriage.

In addition, on a number of these issues the Republican Party has developed a reputation—mostly but not completely unfair—as judgmental and retrograde. It didn’t help that, during last year’s primary season, one of the final two major candidates in the field (Rick Santorum) promised that if elected he would speak out against the damage done to American society by contraception, or that just prior to the general election, two ultimately failed candidates for the Senate spoke with stunning insensitivity about female victims of rape.

In combination, all these factors have left many in the GOP in a demoralized state, convinced that the challenges confronting them are not superficial, cyclical, or personality-oriented but that prevailing political forces, as well as prevailing public attitudes, present enormous obstacles to the national success of their party. They are right to be worried.

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What, then, needs to be done? A good start may be to learn from the past. This is hardly the first time a political party has needed to take stock of new political realities and to recalibrate accordingly.

By the early 1990s, the Democratic Party had endured a miserable, two-decades long losing streak in presidential elections. (The one exception was the election of Jimmy Carter in the wake of the Nixon-era Watergate scandal.) Since the party’s nomination of George McGovern in 1972, the Democrats had come to be viewed, with some justice, as outside the cultural mainstream: flaccid on national defense if not quasi-isolationist, incapable of keeping order in our streets, and anti-growth in their economic philosophy. It had become an omnium-gatherum for left-liberal true believers.

In 1972, an anonymous Democratic senator, later revealed to be Thomas Eagleton, famously referred to George McGovern as the candidate of “amnesty, abortion, and acid.” No wonder, then, that McGovern went on to lose 49 of the 50 states to Richard Nixon. “Nothing is more certain in politics,” wrote William Safire in the wake of this Democratic fiasco, “than the crushing defeat of a faction that holds ideological purity to be of greater value than compromise.” To a greater or lesser degree, that was the case for the Democrats for almost the next 20 years.

Enter Bill Clinton—a reform-minded Southern governor who knew instinctively what had to be done. Having won office in an ideologically challenging part of the country, and having learned from bitter personal experience the lessons of electoral defeat, Clinton resolved to revitalize the party and recharge its connection with the middle-class voting public.*

In preparing for his 1992 presidential run, Clinton became chairman of the Democratic Leadership Council (DLC), a centrist group formed in the aftermath of the 1984 loss to Ronald Reagan. Consciously seeking to distance itself from the rhetoric of the McGovern/Carter/Mondale/Dukakis years, the DLC stressed the core themes of opportunity, responsibility, community, and entrepreneurial governance. Clinton, proclaiming himself a “New Democrat,” called in 1991 for a “New Covenant” between the American people and the government: a “solemn agreement…to provide opportunity for everybody, inspire responsibility throughout our society, and restore a sense of community to our great nation.”

Importantly, Clinton anchored this message in concrete issues: promoting national service; making our streets and neighborhoods safer; strengthening the traditional family and creating a more family-friendly workplace; promoting educational accountability and advocating public-school choice; and, especially, “ending welfare as we know it.”

Welfare was “key,” as Elaine Kamarck, a Clinton adviser, put it, “because it was about values.” And when it came to the value of work, the Democratic Party was out of step with most Americans, who “resented the culture of welfare and the culture of dependency.”

If the promise of welfare reform “sent a political signal,” in Kamarck’s words, a no less powerful political signal was sent in the late spring of 1992 when the rap artist Sister Souljah, who had made racially charged remarks about killing white people, spoke at a convention of Jesse Jackson’s Rainbow Coalition, then still a strong force within the Democratic Party. A day later, Clinton took both Sister Souljah and her host to task:

If you took the words “white” and “black” and reversed them, you might think David Duke [a white supremacist state legislator from Louisiana] was giving that speech…. We have an obligation, all of us, to call attention to prejudice whenever we see it.

Almost immediately, the polls registered an improvement in the public’s attitude toward Clinton as a potential leader. The concept of “a Sister Souljah moment”—that is, a point at which a candidate stands up to the extreme elements in his own party—entered the lexicon of American politics.

Of course, Clinton’s party was still the party of the left, and Clinton made sure to embrace its caricature of the Reagan-Bush era as a “gilded age of greed and selfishness.” But his mouthing of such clichés was of lesser import than his work of ideological renovation, combined with his sophisticated ground game aimed at revising his party’s encrusted nominating system. In presenting himself to the American public, he invoked his intended policy initiatives, as well as his willingness to confront ideological excesses within his own coalition, as emblems of a Democratic shift toward mainstream values.

As his two victories conclusively demonstrated, it worked.

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In the United Kingdom, the ideological disability faced by Tony Blair’s Labour Party was more acute than what Bill Clinton faced as a Democrat. Prior to Blair’s victory in 1997, Labour had suffered four election defeats and had not won 40 percent of the popular vote since 1970. The core of Labour’s support—blue-collar workers in industries such as coal, steel, and shipbuilding—was being replaced by a service-based economy. Labour was a radical party, favoring such things as unilateral nuclear disarmament and the wholesale nationalization of key industries. It was viewed as hostile to the police and two-parent families. Labour had lost Middle Britain.

Tony Blair was the driving force for modernization. He went about creating what he called “New Labour,” which he viewed not simply as a slogan but an attitude. It meant “confronting the old attitudes of the party not from time to time but every day, at every moment, on each occasion when they tried to reassert themselves.”

The issue that first signaled that Blair was a different kind of Labour Party politician was crime. A wave of youth crime was sweeping the nation, and Blair hit the issue head on. He refused to make excuses for crime, as many in his party were inclined to do, and he put it in the broader context of personal responsibility and the duties of citizenship. In a speech he said: “We cannot exist in a moral vacuum. If we do not learn and then teach the value of what is right and what is wrong the result is simply moral chaos which engulfs us all.” Blair’s close aide Peter Mandelson reportedly believed the speech was “a turning point in the party’s reconnection with the voters of Middle Britain and a seminal speech for Blair.”

Then there was Clause IV of the Labour Party constitution. Drafted in the early 20th century by the Fabian Sidney Webb, it called for “the common ownership of the means of production, distribution, and exchange.” This was a hallowed text for the left, but Blair didn’t care. “Changing it was not a superficial thing; it implied a significant, deep, and lasting change to the way the party thought, worked, and would govern,” Blair wrote in his autobiography. And so at Labour’s 1994 convention, in the words of Blair biographer Philip Stephens, “Clause IV was buried, and New Labour was born.”

On a whole range of other issues—including welfare, education, economics, and defense—Blair put in place a new intellectual framework that he believed connected his party to the modern world. Blair saw his task as both to teach the Labour Party a new political language and to “change the way it thinks.” He succeeded, and in May 1997 won the biggest election victory in Britain since the 1930s.

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Which brings us to today’s GOP.

It is important not to forget the positive in today’s situation: After all, Republicans not only maintain control of the House of Representatives, they hold no fewer than 30 governorships. Still, the resounding Republican midterm victory in 2010 now seems more like an aberration—a temporary backlash to presidential overreach—than evidence of an upward trend. To the contrary, it is the negatives that are politically fundamental.

This is not just bad news for the Republican Party; it is bad news for the country. As much as at any time in recent history, America needs a strong, vibrant party on the right to speak for the civilizing ideal of limited government. Barack Obama has put in place an agenda of unreconstructed progressivism that is at war, not only with Reaganism, but also with Clintonism. He has exacerbated a massive fiscal imbalance, added a poorly designed entitlement that further destabilizes the health sector, and sounded an uncertain trumpet of global leadership. If Republicans urgently need to recalibrate, and they do, it is because the stakes are so high.

Among some party loyalists, there is a natural tendency to maintain that the GOP is simply suffering from a “communications problem,” that if only Republicans spoke more loudly, more insistently, and with greater purity and passion, they would broaden their appeal and proceed to sweep national elections. But that counsel, appealing as it might be to a shrinking segment of the electorate, is surely not adequate to present circumstances. More is needed than pumping up the volume.

Intellectual honesty is the first requirement of self-renewal. Republican problems are not superficial or transient.

For the GOP to revivify itself and enlarge its appeal, Republicans at every level will have to think creatively even as they remain within the boundaries of their core principles. In particular, five steps are necessary, each in the realm of a pressing national need.

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First, and most important, is focusing on the economic concerns of working-and middle-class Americans, many of whom now regard the Republican Party as beholden to “millionaires and billionaires” and as wholly out of touch with ordinary Americans. This is a durable impression—witness Bill Clinton’s effective deployment of it more than 20 years ago and its continued resonance during the 2012 campaign when Team Obama portrayed Mitt Romney as a plutocrat who delighted in shutting down factories and moving jobs overseas. Sure enough, in November exit polls, 81 percent of voters said that Barack Obama “cared for people like me”; a mere 18 percent said the same of Romney. They also showed that a majority of Americans (53 percent) said Governor Romney’s policies would generally favor the rich, versus only 34 percent who said he would favor the middle class.

In developing a response to these perceptions, Republicans should not downplay their traditional strengths. Given the feeble path of economic growth, reasonable tax rates and a rational tax code are prerequisites for future job creation at sufficient levels. Given the unsustainable path of health-oriented entitlement spending—which threatens to crowd out every other form of federal spending—some party must rise to responsibility. And given the vast potential economic advantage of newly discovered energy sources—both natural gas and shale oil—Republicans should stand for their responsible exploitation.

But gaining a fair hearing on any of these issues requires changing an image that the GOP is engaged in class warfare on behalf of the upper class. Republicans could begin by becoming visible and persistent critics of corporate welfare: the vast network of subsidies and tax breaks extended by Democratic and Republican administrations alike to wealthy and well-connected corporations. Such benefits undermine free markets and undercut the public’s confidence in American capitalism. They also increase federal spending. The conservative case against this high-level form of the dole is obvious, and so is the appropriate agenda: cutting off the patent cronyism that infects federal policy toward energy, health care, and the automobile and financial-services industries, resulting in a pernicious and corrupting system of interdependency. “Ending corporate welfare as we know it”: For a pro-market party, this should be a rich vein to mine.

Four years after the economic and ethical failure of major financial institutions set off a cascade of national suffering, Republicans are still viewed as opponents of institutional reform. Here, Republicans need a touch of Teddy Roosevelt. America’s five largest banks hold assets equal to 60 percent of our economy, a highly dangerous concentration and source of undue political power. These mega-banks—both “too big to fail” and “too complex to manage”—are the unnatural result of government subsidies, not market forces. By supporting the breakup of the big banks, Republicans would encourage competition and create a decentralized system more likely to survive future economic earthquakes.

Together with this, the GOP could commit itself to ensuring a greater degree of social mobility across the board. At the center of any such effort lies a thoroughgoing reform of the federal role in education, focusing on public and private choice, charter schools, testing and accountability, and merit pay for teachers and principals. But a mobility agenda might also include measures to improve job training, encourage college attendance and completion among the poor, discourage teen pregnancy, improve infant and child health, and encourage wealth-building and entrepreneurship.

By tackling such issues in creative, practical, and persistent ways, the GOP would also be making a statement of political philosophy. Rather than being exclusively focused on budget numbers or individual economic rights, Republicans would be demonstrating a limited but active role for government: helping individuals attain the skills and values—the social capital—that allow them to succeed in a free economy. The Republican goal is equal opportunity, not equal results. But equality of opportunity is not a natural state; it is a social achievement, for which government shares some responsibility. The proper reaction to egalitarianism is not indifference. It is the promotion of a fluid society in which aspiration is honored and rewarded.

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Second, a new Republican agenda requires the party to welcome rising immigrant groups. When it comes to immigration, the GOP has succeeded in taking an issue of genuine concern—namely, the lack of border security—and speaking about it in ways offensive to legal immigrants, including vast numbers of Hispanics and Asian Americans (with whom Romney did even worse than Hispanics).

During the 2012 Republican primary season, for example, with candidates vying for the title of who could be toughest on illegal immigration, Herman Cain described his ideal border fence like this: “It’s going to be 20 feet high. It’s going to have barbed wire on the top. It’s going to be electrified. And there’s going to be a sign on the other side saying, ‘It will kill you—Warning.’” In case anyone missed the point, Cain added helpfully that the sign would be written “in English and in Spanish.”

Instead of signaling that America is a closed society, which it is not and never has been, Republicans would do better to stress the assimilating power of American ideals—the power whereby strangers become neighbors and fellow citizens. In this connection, they would also do better, for themselves and for the country, to call for increasing the number of visas issued to seasonal and permanent farm workers; to champion a greater stress on merit and skill in admitting legal immigrants; and, for the 12 million or so undocumented workers in the United States, to provide an attainable if duly arduous path to legal status and eventually citizenship.

Conservative critics of such reforms sometimes express the conviction that Hispanic voters are inherently favorable to bigger government and thus more or less permanently immune to Republican appeals. It is a view that combines an off-putting sense of ideological superiority—apparently “those people” are not persuadable—with a pessimism about the drawing power of conservative ideals. Such attitudes are the prerogative of a sectarian faction. They are not an option for a political party, which cannot afford to lose the ambition to convince.

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Third, Republicans need to express and demonstrate a commitment to the common good, a powerful and deeply conservative concept. There is an impression—exaggerated but not wholly without merit—that the GOP is hyper-individualistic. During the Republican convention, for example, we repeatedly heard about the virtues of individual liberty but almost nothing about the importance of community or social solidarity, and of the obligations and attachments we have to each other. Even Republican figures who espouse relatively moderate policy prescriptions often sound like libertarians run amok.

This picture needs to be filled out, and there is a rich conservative tradition to turn to for inspiration. Included within that tradition is the thought of Edmund Burke, with its emphasis on the “little platoons” of civil society; the Catholic doctrines of subsidiarity and solidarity with the poor; and the ideas developed by evangelical social reformers of an earlier era such as, in England, William Wilberforce and Lord Shaftesbury.

But a turn in this direction cannot be only rhetorical. In pointing to dangers of an expanding central government, Republicans can rightly cite not only the constraints it places on individual initiative but also its crowding-out of civil society and citizen engagement. Specifically, they might propose ways to protect the charitable sector from federal aggression. They might also work to reinforce the activities of civil-society groups by involving them centrally in the next stages of welfare reform, in a robust agenda to overhaul our prison system, and in a concerted effort to encourage civic and cultural assimilation of immigrants.

American society comprises more than private individuals on the one hand, government on the other. Republicans and conservatives can and should take their policy bearings from that crucial fact.

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Fourth, the GOP can engage vital social issues forthrightly but in a manner that is aspirational rather than alienating.

Addressing the issue of marriage and family is not optional; it is essential. Far from being a strictly private matter, the collapse of the marriage culture in America has profound public ramifications, affecting everything from welfare and education to crime, income inequality, social mobility, and the size of the state. Yet few public or political figures are even willing to acknowledge that this collapse is happening.

For various reasons, the issue of gay marriage is now front and center in the public consciousness. Republicans for the most part oppose same-sex marriage out of deference to traditional family structures. In large parts of America, and among the largest portion of a rising generation, this appears to be a losing battle. In the meantime, the fact remains that our marriage culture began to disintegrate long before a single court or a single state approved gay marriage. It is heterosexuals, not homosexuals, who have made a hash out of marriage, and when it comes to strengthening an institution in crisis, Republicans need to have something useful to offer. The advance of gay marriage does not release them from their responsibilities to help fortify that institution and speak out confidently on the full array of family-related issues. Republicans need to make their own inner peace with working with those who both support gay marriage and are committed to strengthening the institution of marriage.

Yes, the ability of government to shape attitudes and practices regarding family life is very limited. But a critical first step is to be clear and consistent about the importance of marriage itself—as the best institution ever devised when it comes to raising children, the single best path to a life out of poverty, and something that needs to be reinforced rather than undermined by society.

Other steps then follow: correcting the mistreatment of parents in our tax code by significantly increasing the child tax credit; eliminating various marriage penalties and harmful incentives for poor and for unwed mothers; evaluating state and local marriage-promotion programs and supporting those that work; informally encouraging Hollywood to help shape positive attitudes toward marriage and parenthood. There may be no single, easy solution, but that is not a reason for silence on the issue of strengthening and protecting the family.

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Fifth, where appropriate, Republicans need to harness their policy views to the findings of science. This has been effectively done on the pro-life issue, with sonograms that reveal the humanity of a developing child. But the cause of scientific literacy was not aided during the recent primary season, when Michele Bachmann warned that “innocent little 12-year-old girls” were being “forced to have a government injection” to prevent the spread of the human papilloma virus, adding that some vaccines may cause “mental retardation.” Bachmann managed to combine ignorance about public health, indifference to cervical cancer, anti-government paranoia, and discredited conspiracy theories about vaccines into one censorious package.

The issue of climate disruption is far more complex, but can play a similar, discrediting role. There is a difference between a healthy skepticism toward fashionable liberal shibboleths and dogmatic resistance to accumulated evidence. Gregg Easterbrook, an environmental commentator who has a long record of opposing alarmism, put it this way: “All of the world’s major science academies have said they are convinced climate change is happening and that human action plays a role.”

To acknowledge climate disruption need hardly lead one to embrace Al Gore’s policy agenda. It is perfectly reasonable to doubt the merits of pushing for a global deal to cut carbon emissions—a deal that is almost surely beyond reach—and to argue instead for a focus on adaptation and investments in new and emerging technologies. Republicans could back an entrepreneurial approach to technical and scientific investment as opposed to the top-down approach of unwieldy government bureaucracies offering huge subsidies to favored companies such as Solyndra. (See above, under “corporate welfare.”)

Confronting climate change is important in and of itself. It is also important as a matter of epistemology, to show that Republicans are not, in fact, at war with the scientific method. Only then will Republicans have adequate standing to criticize junk science when it’s used as a tort weapon or as an obstacle to new energy technologies.

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The agenda sketched above is neither comprehensive nor definitive, but is intended as a starting point for discussion. Its aim is to locate a means of broadening the appeal of the GOP without violating the party’s core principles of life and liberty. Such an approach is consistent with the traditional conservative hope of balancing what Burke called “the two principles of conservation and correction.”

What we have recommended is a series of such corrections, necessary for the task of conservation, and necessary for winning national elections and governing: the political prerequisites to any agenda of reform. These corrections will be the work of many hands, including governors, members of Congress, and policy entrepreneurs. It would also be helpful to create an institution, modeled after the DLC or the Centre for Social Justice in the United Kingdom, whose chief purpose would be to generate the ideas, the arguments, and the policy proposals essential to a movement aimed at winning power and governing effectively. This movement, right now, lacks a headquarters.

In the end, of course, success will also require the emergence of the right presidential candidate in 2016—in some respects the most sobering item in this entire exercise. In the arc of the GOP nomination contest in 2012—involving dozens of state Republican primaries, more than 20 debates, and tens of millions of dollars in ads—issues such as upward mobility, education, middle-class concerns, poverty, strong communities and safe streets, corporate welfare, the environment, cultural renewal, and immigration either were hardly mentioned or, in the case of immigration, were discussed in the most disaffecting way possible. There was more talk about electrified fences and self-deportation than there was about social and economic opportunity and the modernization of our governing institutions.

Any fair-minded survey of rising Republican leaders—the ranks contain, among others, Senators Marco Rubio and Kelly Ayotte, Representatives Paul Ryan and Jeb Hensarling, Governors Bobby Jindal, Chris Christie, John Kasich, Susana Martinez, and Scott Walker, as well as former governors such as Jeb Bush—suggests that the GOP possesses impressive political talent. Their challenge is both to refine and relaunch the Republican message, to propose policies that symbolize values and cultural understanding, to reconnect with a middle America that looks different than it once did, and to confront old attitudes, not from time to time, but every day.

The challenge for primary voters, party activists, and party leaders is different: to create the conditions that will give this talented field the intellectual support and leeway to oppose outworn or extreme ideas within their own coalition and to produce an agenda relevant to our time.