The dust still hasn’t settled from November’s agenda-changing elections. Obama has moved into the White House amid considerable pomp and circumstance (in fact, Time magazine should just be renamed Obama…because he is always on the cover). The President and the Democrat-led Congress are already moving to remake America in what the Party’s leaders perceive to be the direction our country ought to head – which is, simply put, anywhere George W. Bush either hasn’t been or chose not to go.

Unfortunately – or fortunately, depending upon your viewpoint – 2008 marked a low-point for the GOP. The Party, which held strong Congressional majorities and the Presidency for the first half of the 2000s now has neither. Nationally, the 2008 elections left the Party with a true crisis of conscience. What should the Party stand for? How can the GOP be a big tent Party once again? Does the Party need new leadership? How can Republicans adapt to America’s changing Demographics?

These hefty questions are still being debated and discussed in Washington, D.C., around dinner tables and in diners across America. Below are some observations, based on the passage of two-months time since the Obama wave swept the nation. Some solutions follow:

First, the Republican Party lost because it strayed from its core principles – i.e., its lofty rhetoric didn’t match reality. The Party need not become more liberal, as the left so frequently advocates. It must adhere to its core beliefs of economic and, to a lesser but still important extent, social conservatism. But, the Party must embrace those candidates and those voters who don’t ideologically match on all issues. The GOP lost credibility because its arguments on pocketbook or kitchen table issues were empty. Consistent deficit spending, tax cuts while fighting two wars simultaneously, ethical challenges and other missteps were indicative of a Party out of control. Americans were never forced to make any tough choices and there was never an importance placed on a shared sacrifice..and then the economy crumbled. Obama and Congressional Democrats pounced. Ultimately, it galls me that the Party – at least for the near-term future – has zero credibility in talking about pocketbook issues. It will take considerable time for the American public to trust the GOP again. The Party’s leaders must get focused, remain consistent, and hope for Democrat screw-ups (thankfully, which will come).

Second, the GOP needs to find real, tangible ways to address America’s changing demographics. A simple look at the faces in the crowd at the Republican and Democrat conventions last August illustrates this problem. In Minneapolis, picking out people of color was very easy because there were so few of them in attendance. Denver, on the other hand, looked like the America in which I live. It was multi-ethnic…it was cool. How the Party attracts and welcomes multi-ethnic America will, in a large part, determine its ultimate success or failure. Trust me, this is a big problem for Republicans, as the California GOP knows all too well.

Third, the GOP needs new, fresh faces and better messaging. I stood on the Capitol steps when Newt Gingrich and young Congressional Republicans boldly announced the Contract with America. It was a fresh wind in a stagnant Washington, D.C. The Contract signaled two things. First, it pushed aside tired, accommodating Republicans who had been in the minority for so long that they forgot what it took to lead. Second, it fundamentally changed the debate. While the circumstances are different in 2009–GOP leaders led and failed-the end result needs to be the same. The Republican Party is in desperate need of new, young leaders who have no sacred cows, will think creatively about the Party and will offer new, conservative solutions for America. California’s Kevin McCarthy (R-Bakersfield) is one of these young, innovative leaders. Kevin and his colleagues just need to grasp the brass ring.

Fourth, Republicans need new, aggressive think tanks churning out mainstream American ideas. The Democrats figured it out – it’s all about positioning (or mainstreaming) and message delivery. Since the 2000 Presidential election, when the Democrats wandered the wilderness, left-leaning fat cats invested hundreds of millions of dollars in think tanks and advocacy organizations. These entities became idea-mills for Democrats and, once policy proposals were cooked, they utilized vast distribution networks to disseminate this information. These positions – many of them repackaged 1960s and 1930s big government liberal ideas – became accepted as mainstream. The news media picked up this “buzz” and more and more Americans began talking about these “new solutions.” Simply put, Republicans for the better part of the last decade got fat and happy in power and lost the idea war, far more costly to the Party than the wars in Iraq and Afghanistan. Unless and until this trend is reversed, the GOP will remain in trouble.

America remains, by and large, a slightly conservative country. What 2006 and 2008 demonstrate, though, is that the American public wants empathy and action, and they got neither from Republicans. President Obama and Congressional Democrats listened and were able to cast themselves as centrist and committed to solve problems.

Ultimately, for the GOP, solving this problem will take four to six years, new leadership and hundreds of millions of dollars. Tearing down President Obama and his policies is not the path to power. New, better ideas, effectively packaged and delivered by new, credible leadership is. Unless and until this occurs, the Democrats will hold power and steer the country in any direction they please.