Thomas Edsall has a long piece in this week's The New Republic (registration, but not subscription) which is quite good. While I don't necessarily agree with many of Edsall's points, he makes a number of astute observations:

--Many Democrats--and writers such as Thomas Frank--have called for the party to reconnect with the white, working-class, male voters it has lost over the decades. The problem with this call to populism is that the party's most influential wing is not populist; it is elitist--affluent, well educated, urban, indifferent (or hostile) to organized religion, and, on the controversial social issues of abortion and gay marriage, well to the left of the general public. The values of this elite tend to prevail in party debates and in the crafting of Democratic platforms.

--This has led to a profound realignment in U.S. politics. Once characterized mainly by the economic split of the Great Depression--a split that played to the Democrats' advantage for the better part of a generation--the parties now divide differently. Put simply, the Democratic Party has become the political arm of the subdominant, while the GOP is home to the dominant groups in American life.

-- Indeed, the pervasiveness of risk in today's economy has made many Americans feel it is safer to look out for yourself and your kin than to place your fate in the hands of a politically controlled collective. Risk is now, for better or worse, a central feature of American life--for managers, entrepreneurs, professionals, and workers. Both substantively and stylistically, Republicans speak to this prevailing mood in a way that Democrats do not.

--The Iraq war may someday be viewed as a political overreach of sorts, it seems unlikely that it will lead to a fundamental realignment of the electoral landscape. To be sure, there are plenty of unknowns that could bring about such a realignment: the approaching retirement of baby-boomers, the growing ranks of Latino voters, another terrorist attack, a serious economic decline. But, unless Democrats are rescued by a major trend or an unforeseen event, they will probably be making Karl Rove look good for many years to come.

I think Edsall's conclusion here is more or less correct. The Latino issue is a salient point and Republicans are vulnerable on both sides of this issue. If mishandled by the GOP it could help Democrats significantly in the long-term. However, as far as another terrorist attack, as long as the anti-war left is prevalent on the Democratic side, another terrorist attack is not going to help the Democrats in the long-term.

The sleeper issue is the growing investor class (I include homeownership along with stocks when talking about this group) which is a significant macro trend that strongly favors Republicans. This is one of the reasons Democrats fought so hard to prevent letting individuals have any control over the retirement money they put in Social Security. The more the public begins to rely on itself, the less need it has for government which in turn, needless to say, deeply undermines a core philosophy of the Democratic party. But the increasing tolerance for risk among that portion of the American public is a double-edged sword that could potentially lay the seeds for a Democratic revival in the event of a risk-precipitated economic collapse. In other words, another depression would be the "unforeseen event" that would end this Republican trend.