First of all, let me say that I've had quite a bit more than I can stomach of the suggestion that the "values" issue was decisive in Kerry's defeat, and even more than I can stomach of the suggestion that Democrats can and should even court this segment of the populace for whom these issue are paramount.
The voters who cited "values" in exit polls are hardcore evangelicals and fundamentalists who are not going to be swayed by an image makeover (as Bill Clinton seems to believe), and caving into them on substance means the Democrats can kiss goodbye the 50 million pro-choice voters who supported them in this election, and the five million gay and lesbian voters who supported them in this eleciton.
Furthermore, all of this is beside the point.
As Andrew Sullivan (and others) have pointed out, the percentage of voters who selected "values" as the important issue in this election has actually declined significantly since the 1990s.
The real wedge issue of this election was what many of us believed it would be - national security and foreign policy.
And while Democrats may have picked up more votes in economically troubled Ohio with a bolder economic plan, it would not likely have had much of an impact in other crucial swing states (including most notably Florida.)
This election was fundamentally a referendum on George W Bush's strategy in the so-called war on terror.
And he won.
The fundamental difference between Bush and Kerry in this election on foreign policy is that Bush has openly embraced a hopeful vision of democratic transformation in the Arab world, and successfuly portrayed that trasnformation as central to eliminating the threat of radical Islamism against America and her interests.
Of course we can dither about Bush's incompetence in prosecuting the war in Iraq (which is nearly criminal), and his failure to follow through on his own mideast democracy initiative, but Kerry never so much as used the words "Arab" and "democracy" or even "Iraq" and "democracy" in the same sentence during the campaign. He spoke a great deal about the importance of "multilateralism," but multilateralism is a tactic, not an end in itself, not a strategic goal.
Where was John Kerry's marshall plan for mideast democracy? Where was Kerry's criticism of Bush for cozying up to new Arab and Muslim despots in Libya and Uzbekistan? Where was John Kerry's grand strategy in this war?
And ironically had Kerry run as a liberal hawk he would have had the lattitude to skew much further to the left on domestic issues, pushing progressive taxation, significant trade reform, universal health care, a rollback of corporate welfare, a new homestead act for the plains states, a Manhattan Project on energy independence, etc.
The war in Iraq may well fail, burying the neoconservative dream of Arab democracy, but until that happens decisively Americans will side with hope and the prospect of freedom in the Muslim world as central to winning the "war on terror."
At this point, the Democratic Party does not need to rethink its foreign policy. Its entirely in Bush's hands. However, if the situation in Iraq improves, the Democrats need to realize that continuing to run on a platform of liberal internationalism in the age of Islamist terrorism will leave them in the political wilderness for most of the next generation.
Reality is rarely a pleasant thing.