I recommend Geral Seib's article U.S. Shifted Parties, Not Ideology in today's Wall Street Journal. As he points out, polling data over recent years has shown almost no shift in American public ideology, despite the change in the party in power. America is basically a center-right nation, and has been for a long time. The Democrats mistake, he argues, was to interpret the last election as a liberal mandate, when instead it just reflected dissatisfaction with the previous Republican administration.
My read on the situation is that the Democrats have let their far-left liberal wing take over the party, and that this in the long run will hurt them just as much as the far-right has hurt the Republican party. Whichever party first realizes that the key to sustained power is capturing and holding the moderate political middle of the country will be the one that emerges best in the coming decades.