I read a great line this morning:
"College educated Americans have concluded that their bank accounts are safe with the Democrats, but that their values are under assault by the Republicans."
It seems to me that this gets to the heart of things. The Reagan coalition depended on supplementing free-market capitalists with Reagan Democrats who wanted a return to muscular patriotism.
The Bush 2 Administration somehow managed to reverse Reagan's alchemy--it dramatically enlarged the Federal government, and its tendency to paint its opponents as friends of terrorism struck most as McCarthy-esque rather than patriotic.
Reagan helped everyone--Democrat and Republican--feel better about being American. Bush 2 made everyone feel worse. Then along came Obama with a Reaganesque charisma and a message of hope.
In the 80s, the Democrats couldn't understand how Reagan managed to convince the Reagan Democrats to vote "against their economic interests" (a debatable point; Reagan's changes to the tax code may have helped rich voters most, but they almost certainly helped the Reagan Democrats as well--I'm firmly of the opinion that I'd rather do better on an absolute basis than on a relative basis). Their reaction was simply to restate their message in shriller tones; only Bill Clinton's triangulation strategy managed to win the White House for them, and that only because of the Perot effect.
Now in 2008, certain Republicans can't understand how Obama managed to convince the Obamacons to vote against their economic interests and elect a redistributionist. "If we just restate our old positions more strongly," they reason, "People will eventually come to their senses."
Palin is still fighting the last war, much like the Democrats during the Reagan era. Time to move on.