I've written time and time again (see, e.g., here) that I think the future of libertarianism will be inextricably linked with the Democrats (the nominal coalition of the Left) more than the Republicans, with whom libertarianism has been most associated for the last few decades. The fundamental basis for this argument has been that the Republican Party coalition has become untenable (see, e.g., here) , creating a situation in which the modern Republican Party can no longer be reconciled with any conception of libertarianism beyond lip service to "lower taxes" and "lower spending." In order to form a coherent but electable coalition again, the Republican Party will have to reach out in new directions. Huckabee-style conservative populism, and McCain's National Greatness Conservatism, are the natural ideological viewpoints around which to build this new coalition, as they combined are capable of retaining virtually all of the remaining coalition while also bringing in some traditionally Democratic voting blocs (and/or swing voters), to wit: the elderly and working-class whites with relatively little education. As this happens, and as socially liberal, fiscally conservative people (the broad definition of "libertarian") become an increasingly Democratic voting bloc, my theory holds that the Dems will become more fiscally conservative while the Republicans will become more fiscally liberal.
What we saw the other night was the beginning of this. Indeed, as Will Wilkinson points out, despite the conservatives fears about Obama's "spread the wealth" theme, the wealthiest voters switched their votes from Republican in 2004 to Democrat in 2008 at an unusually high rate. Meanwhile, the only demographic group where Obama actually lost support compared to 2004 was the elderly. I think there was also some evidence of a minor PUMA effect, as - despite the extremely favorable political environment, Obama did no better than Kerry amongst self-identified Democrats - the only other group where Obama failed to outperform Kerry. If you will recall from the primary campaign, PUMAs tended to be more socially conservative but fiscally liberal Hillary Clinton voters.
If the above shifts do represent a semi-permanent change in the electorate - and I obviously think they do, since that's the whole point of what I've been arguing lo these many months - then we can expect the Dems to slowly start moving in a more fiscally conservative direction just as the Republicans slowly start moving in a more fiscally liberal direction (actually, they won't have to do this slowly, since Bush pretty much already put them there). Thus, Wilkinson is I think clearly right when he states:
In the short term, this might make for a decrease in polarization on economic policy, which may produce bipartisan support for policies that will horrify libertarians. In the long term, the Democrats will continue to become ever more “socially liberal and fiscally conservative,” despite the attempt of the ideological left-leaning media and academic opinion elites (who are full of New New Deal ideas) to prevent this.
That said, although Wilkinson is right when he says that "The GOP is now pretty clearly the party of the religious, white, middle-aged and elderly middle class–not a group with a shining political future," I don't think this means the GOP is permanently a minority party. Instead, if indeed Huckabee populism and National Greatness Conservatism are the future of the Republican Party, then we can expect an end to Republican anti-immigrant rhetoric. This will only be hastened by the troubled economy, which will necessarily reduce immigration (both legal and illegal) without any further government intervention. If I'm correct, then I think this election will have represented the high-water mark of Latino voting for Democrats, who will over time become increasingly Republican.
More at memeorandum.