The key issue is the elasticity of labor supply. Some economists do believe, as you suggest, that this elasticity is small and, as a result, that taxes aren’t very distortionary. Others believe that the elasticity is larger. Economist Ed Prescott has suggested that the main reason Europeans work less than Americans is the higher tax rates they face.

Think of it this way. Imagine that you are a painter deciding whether to accept another painting job this weekend. I am willing to pay you $500 for the work. It is possible that you would do the job for $500 but not for $300 (the amount you would keep after paying payroll taxes, federal income taxes, and state income taxes)? If you think that all workers make such decisions without regard to remuneration, then the assumption of inelastic labor supply is correct. In this case, taxes are not distortionary. But if some people respond to incentives and would do the job for $500 but not for $300, then that response is what makes taxes distortionary.

How Distortionary Are Taxes? from Greg Mankiw

Marriage is in decline across much of northern Europe, from Scandinavia to France, a pattern some sociologists describe as a “soft revolution” in European society — a generational shift away from Old World traditions and institutions toward a greater emphasis on personal independence.

But French couples are abandoning the formality of marriage faster than most of their European neighbors and far more rapidly than their American counterparts

The increase in out-of-wedlock birthrates is even more dramatic: Last year, 59 percent of all first-born French children were born to unwed parents, most by choice, not chance. The numbers were not driven by single mothers, teenage mothers or poor mothers, but by couples from all social and economic backgrounds who chose parenthood without marriage vows.

Article Link.

Unless the life chances of children raised by single mothers suddenly improve, the explosive growth of the U.S. Hispanic population over the next couple of decades does not bode well for American social stability. Hispanic immigrants bring near–Third World levels of fertility to America, coupled with what were once thought to be First World levels of illegitimacy.

To grasp the reality behind those numbers, one need only talk to people working on the front lines of family breakdown. Social workers in Southern California, the national epicenter for illegal Hispanic immigrants and their progeny, are in despair over the epidemic of single parenting. Not only has illegitimacy become perfectly acceptable, they say, but so has the resort to welfare and social services to cope with it.

Dr. Ana Sanchez delivers babies at St. Joseph’s Hospital in the city of Orange, California, many of them to Hispanic teenagers. To her dismay, they view having a child at their age as normal. A recent patient just had her second baby at age 17; the baby’s father is in jail. But what is “most alarming,” Sanchez says, is that the “teens’ parents view having babies outside of marriage as normal, too. A lot of the grandmothers are single as well; they never married, or they had successive partners. So the mom sends the message to her daughter that it’s okay to have children out of wedlock.”.

Hispanic Family Values?

The child of academics, raised in a liberal household and educated in the liberal arts, [Arthur C.] Brooks has written a book that concludes religious conservatives donate far more money than secular liberals to all sorts of charitable activities, irrespective of income.

…

The book’s basic findings are that conservatives who practice religion, live in traditional nuclear families and reject the notion that the government should engage in income redistribution are the most generous Americans, by any measure.

Conversely, secular liberals who believe fervently in government entitlement programs give far less to charity. They want everyone’s tax dollars to support charitable causes and are reluctant to write checks to those causes, even when governments don’t provide them with enough money.

Such an attitude, he writes, not only shortchanges the nonprofits but also diminishes the positive fallout of giving, including personal health, wealth and happiness for the donor and overall economic growth. All of this, he said, he backs up with statistical analysis.

“These are not the sort of conclusions I ever thought I would reach when I started looking at charitable giving in graduate school, 10 years ago,” he writes in the introduction. “I have to admit I probably would have hated what I have to say in this book.”

Still, he says it forcefully, pointing out that liberals give less than conservatives in every way imaginable, including volunteer hours and donated blood.

Philanthropy Expert Says Conservatives Are More Generous

Depolarize Politics

No more debates about abstinence versus having twelve year old children put condoms on cucumbers. No more debates about school prayer. No more debates about back to basics education versus new-fangled experimentation. Everyone is happy. A whole realm of toxic, polarizing political debate will immediately and permanently drop off the political radar.

No more forcing Christians to buy a secular education for their children with their taxes. No more backlashes as well-meaning Christians then try to include a semblance of moral guidance with school prayer.

Cheap Housing

One reason to buy a house in a good neighborhood is to send your children to good quality public schools. Good schools are a powerful draw that can bring in many families - more than the local school system can handle. At this point the town faces a dilemma. They can raise taxes and build new schools, but no one likes higher taxes. Newcomers also bring the risk of watering down the quality of the education - particularly if they are lower on the socio-economic ladder than the current residents.

The other option is to shut out the newcomers. Town councils and land use boards become reluctant to zone for more housing. This keeps the taxes low and the school quality high. It also means that schools are a powerful constraint on the supply of housing (traffic is another important constraint - towns will not zone for more housing if the roads are too busy). First you get an anti-growth zoning board, then you get increasing prices as couples are forced to bid against each other for a limited supply of housing.

School choice and vouchers are the solution. They break the connection between school quality and neighborhood, thereby de-escalating the bidding war for houses. Parents could live in the “nice” parts of “bad” school districts and use their voucher to send their children to different public schools or to a private school.

School choice is typically a conservative issue, but The Two Income Trap makes the liberal case for school choice. Here is an interview with the authors by the liberal magazine ‘Mother Jones.’

Better Education For Minorities

I have yet to discuss whether school choice actually results in a better education. Studies have typically not found benefits, but there are a few reasons for this. The first is that the public schools in the district are used as control groups. But often competition forces them to clean up their act. Secondly, competition is an ongoing process that can take literally decades to unfold. It is only over the past 10 years or that SouthWest and JetBlue have become major players in the airline industry, but it was deregulated in 1978.

One bright spot in the studies is that school choice has benefited blacks. Drawing upon my wife’s experience as an inner city middle school teacher, I suspect I know the reason. Any teacher will tell you that there are a couple bad apples in every class that take up a disproportionate amount of their time. The problem students are even worse in the inner city schools. They are usually born out of wedlock - the number one cause of poverty and low achievement in education. Because of their unstable home life, their mothers are of little help for changing their behavior.

But most of the students in the inner cities want to learn. The single most important thing that would benefit them is to get them away from the problem students and the discipline cases. School choice lets them get into a positive educational environment where their friends and fellow students all want to learn.

Here is a fairly common liberal argument:

The North is wealthy and votes Democratic
The South is poor and votes Republican

The problem with that argument is that historically the North voted for Republicans, and the South voted for Democrats. But over recent decades they have flip-flopped (read about this realignment here and look at the election maps here - note that the Republicans states are colored blue in the older maps).

The Republican counter goes like this:

Until recently, the North has voted Republican and was wealthy
Until recently, the South voted Democratic and was poor

There is good evidence in support of the Republican argument: Red states are growing faster than blue states. The Pacific Research Institute ranks the “economic freedom” of states based upon factors such as taxes and regulations. In this article they find:

In November, 23 of the 25 freest states voted for Bush. In stark contrast, 17 of the 25 least-free states voted for Kerry. In the long term, the differences in economic freedom will magnify this partisan divide as people continue the move to freer states and take their Electoral College votes with them.

Red states have smaller governments - are more economically free - than blue states. And people are voting with their feet and moving to red states:

New Census Bureau numbers show that the 10 fastest-growing states — from No. 1 Nevada to No. 10 New Mexico — are in the West and the South. Bush won nine of them in November. This population growth helped the red states gain seven Electoral College votes after the 2000 census, and will drive more gains after the 2010 reapportionment since demographers agree these places are gaining popularity

…

The U.S. Economic Freedom Index shows that people are fleeing less economically free states to live in freer states. The net domestic migration rate was up 19 people per 1,000 for the 20 freest states but down a dismal 16 people per 1,000 for the 20 least-free states. New York and California experienced the largest net loss of domestic residents during 2003-04. They also have the least economic freedom.

The cost of living is also lower in red states. Here is an article in the Wall Street Journal (it is worth reading the whole thing):

Monstermoving.com lets you discover relative buying power if you lived somewhere else. Let’s type in L.A. and Tucson, just next door: “A salary of $30,000 in Los Angeles has the same buying power that a salary of $13,448 has in Tucson.” For Las Vegas the figure is $13,241. If on top of this they elect a Gray Davis governor, why stay?

Here is a good article from the Wall Street Journal’s Op-Ed page making the point that regaining Congress is hardly a victory for the left, or a repudiation of conservatism.

Only about one in four Americans currently say they believe that the Democratic Party is friendly toward religion, according to the Pew Research Center for the People and the Press. The practical impact of this belief is nicely described by author Stephen Carter in his book, “The Dissent of the Governed.” He describes two black evangelical women who change their affiliations from liberal political groups to conservative Christian organizations, explaining that “they preferred a place that honored their faith and disdained their politics over a place that honored their politics and disdained their faith.” These women are part of a real trend among religious Americans: According to the National Election Surveys, religious Democrats are more likely than any other group to change their party affiliation. Between 2000 and 2002, they were nearly four times more likely to do so than secular Republicans.

What about young people? Maybe the left can, like it always has, look to the culture of youth to jumpstart the progressive movement. But even here, things are going conservatives’ way. The left’s traditional edge among young adults shrank from 1974 to 2004, as the percentage of adults 18-25 who labeled themselves political liberals fell by 12%, and the percentage saying they were conservative rose by 143%.

Read the rest of the article here.

One part that I did not find convincing was the discussion about the Hispanic vote (which I do not quote). I suspect that immigration could be a rallying point, at least for some sections of the Hispanic community. But this also has consequences, such as driving blacks into the Republican party - blacks and Hispanics tend to compete for the same jobs and there is mounting tension between the two groups. I doubt that one party will be able to get both groups over the long run.

UPDATE: here is a somewhat dissenting point of view that observes, correctly I think, that overall the winning Democrats are not conservatives, but within the mainstream or liberal wing of the party.