The biggest problem we Dems have facing us and that needs to be addressed first is the local and state political scheme.
I maybe wrong because I am going by just Ohio, I believe it is the case in many states. I will research it.
In 2000, the census came back and redistricting was forced. States like Ohio were then sliced up again to foster a definitive GOP advantage (since the statehouses are responsible for districting and therefore the party in charge can gerrymander districts).
1994's GOP "revolution" wasn't really about the US offices, they won those but what their focus was on was the states, and they took quite a few. This allowed them to prepare and by the time redistricting came about they were able to reinforce their powerbase. (The Dems. have done this it's part of the game.)
Now the Dems. are faced to do something similar if they plan to have any power. They need to win these states back. In doing so, they will be able to in 2010's redistricting be able to regain what they've lost.
People think this "revolution" happened all at once, it didn't the GOP did the best possible thing in 1992 whether they realized it or lucked into it and that was lose the Federal offices but strengthen their base support in the states.
What the Dems. have to do (and I am not saying go right and become pseudo conservatives) is find what the base wants now, recruit great minds and start winning ground floor state elections, and hopefully, get strong enough to take the US House back in '06. (Which with 2 years of GOP in total control I think is highly possible.)
The presidency, US senate and governors are strange animals though, they do not rely on the districting but the state as a whole. They absolutely have to appeal to the masses and not just districts. That means they should be more centrist.
The Dems. need to fight the NRA's and Bible thumpers much the way those 2 powerhouse groups fight the Dems. Instead of giving them (pardon the pun) ammo, the Dems need to secure a position that is acceptable (in their district) while the Pres., Sen., and Gov. focus on the states as a whole regarding the issues.
If you're a Dem. running in a very religious district you need to make it clear that while you are very supportive of other issues in the party, you do not approve of gay marriage, or gun control in NRA districts. You need to get across that you REPRESENT the people of that district and you believe that you do it better than the GOP. I don't see the Dems doing that right now. The locals focus on national "headline issues" and are aboard for all party issues and they can't be.
Just my 2 cents.
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I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"
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