NOT TO BE REDUCTIONIST...
But the more numbers-cruching of exit polls and analysis of vote totals I read (for example those at the Not Quite Emergerging Democratic Majority site), its more and more apparent the number one reason the Dems lost was national security. Its the best explanation for the dramatic decline among white, working-class women (maybe the security mom existed after all), its the best explanation for Bush's gains among secular voters (have you run into any rabidly homophobic atheists recently?), and its best explanation for Bush's surprising gains in Blue America (especially in New Jersey) that were essential to his winning the popular vote.
The good news for Democrats is that there is really no need to sacrifice any core principles on economic, social or cultural issues. The bad news - the Dems will need to get as tough on terror as they were on Communism during the Cold War, a move that will met with stiff resistance by much of the party's activist base (Hollywood, hard-line civil libertarians, Jeffersonian peaceniks). And even worse news for the Dems, it is by no means certain that the hawks will win.
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