I’m not confused. The problem is exactly what you’ve said; the GOP has abandoned economic conservatism and focused too much on social conservatism, both of which have caused a backlash against the party in the North. There’s the Southern populist version of conservatism, and there’s there’s the old Yankee small-government conservatism. I expect in 2012 we will see those two wings fight it out with Huckabee and Romney as their standard bearers, respectively.
BRAVO!!! Its not merely a question of yankees versus rebels, however. Its a question of western leave-us-alone libertarianism versus the let's-convert-the-nation and world to our values crowd, to say nothing of the entrepreneurial/professional classes (the latter including engineers) versus the non-college educated/some college rural voters. It takes all types to build a winning coalition, and we just haven't been doing that since 1994.