Since Abraham Lincoln’s election in 1860, the new two party system has gone through 3 distinct presidential phases, Republicans dominated in the first and third, Democrats in the 2nd. We may now be in the fourth, another Democratic era. The president’s State of the Union address last night suggests he agrees with our thesis.

Many conservative columnists, talk show hosts, digital bloggers, and campaign strategists will vehemently object. They say unemployment is too high, public approval of the country’s direction too low and prospects for good news at home or aboard too bleak for President Barack Obama to win: unless the GOP nominates a weak challenger.

History disagrees.

Phase One: The Iron Age of Republican Unity

From 1860-1932, 12 Republicans were elected President, most winning by a landslide at least once. Hapless Democrats fielded only two winners, neither securing a popular vote majority. The “Roaring Twenties” produced back-to-back-to-back GOP landslides by 3 different nominees, an unequaled political feat.

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Phase Two: The Golden Age of Middle Class Democratic Liberalism

Franklin Delano Roosevelt’s 1932 landslide began phase two, lasting through the 1964 Lyndon Baines Johnson landslide. The lone Republican winner was Dwight D. Eisenhower, derided by conservatives as a “dime store New Dealer”. FDR and LBJ remain the only Democrats to break the 55% landside marker.

Phase Three: The Steel Age of Cold War Conservatism

With America quagmire in Vietnam, cold war warriors Richard Nixon, Ronald Reagan and George H.W. Bush got the GOP groove back. They won 5 of the six elections between 1968 and 1988, winning big popular vote margins 4 times. Watergate allowed Democrat Jimmy Carter one term with a bare 50.1%. A steely resolve to confront the Soviet Empire with American might became the GOP trademark, along with depicting Democratic opponents as weak and thus risky.

Phase Four: The Emerging Bronze Age of Compassionate Capitalism

The growing middle class squeeze exposes anew the hidden cost in the misnomer “free enterprise.” As Adam Smith pointed out centuries ago, there are no “free markets” any more than there is a “free lunch." Capitalism is a means to an end, not an end into itself. 

The goal is to keep market forces and government regulation in the most productive, least coercive balance to maximize individual freedom within a society's social contract. Every Republican President has understood. George W. Bush called it “compassionate conservatism.” But today’s conservatives deride him for it.

But Bush knew better. H. Ross Perot’s 1992 anti-NAFTA challenge forewarned that the new global economy was opening up old economic wounds. Democratic presidential candidates grasped the meshing economic, political and social implications.

Clinton-Gore-Obama mark the first time 3 different Democrats won the popular vote in any 12 year stretch. Clinton-Gore-Kerry-Obama achieved another Democratic first: Four consecutive party candidates in a 20-year period winning the combined popular vote. Bill Clinton became the first Democrat in the Post WW 2 era to achieve consecutive victories. Barack Obama received the biggest percentage margin of any non-incumbent Democrat since FDR. Mr. Bush, the only GOP winner, won re-election with 50.7%, the lowest of any successful GOP incumbent in history.

On the surface, the developing Democratic coalition seems impossible: white professionals, increasingly with post-graduate degrees, joining high school educated working class non-whites. But they share an important commonality: an understanding of the new social and economic Darwinism in the 21st century. The GOP sees them as pro-government. 

But this interpretation misreads. 

They question whether the “invisible hand” of market forces can be trusted given the reality they face and the previous history they learned. They fear the GOP is too prone to favor the strong over the weak. Governor Mitch Daniels gave a thoughtful rebuttal last night until he claimed “[n]o feature of the Obama Presidency has been sadder than its constant efforts to divide us, to curry favor with some Americans by castigating others.”

This type of demonization didn’t work against Roosevelt or Johnson. “Compassionate capitalism" is our term for this era. We believe Americans want to create a bigger pie but so that everyone can get a bigger piece, to paraphrase President Kennedy. To be sure, the President may be in danger of going too populist. But his GOP rivals risk being way too negative, misunderstanding Reagan’s genius. As he said, he wanted people to leave the movie theatre feeling good. But GOP presidential hopefuls seemingly want viewers to leave angrier than when they tuned in.

Cold War Conservatism prevailed by making California solid Republican and several key swing states GOP leaning. But now Big Sur is solidly Democratic, meaning several key swing states are GOP must-wins. 

If Democrats run in 2012 on a credible “compassionate capitalism” platform, forget those claiming President Obama will be very lucky to win. Rather, it will take bad luck for him to lose.

Paul Goldman is former chairman of the Democratic Party of Virginia. Mark J. Rozell is professor of public policy at George Mason University.