The original post prompted quite a few comments between Colin and myself, so I thought it would be interesting to post this entry from Will Wilkinson writing in Democracy in America on Economist.com. Mr. Wilkinson says:
Although Americans left and right have remarkably consistent "ideologically conservative but programmatically progressive" preferences when it comes to redistributive social policy, it benefits political parties and party politicians to greatly exaggerate their differences. Partisan brand identity and distinction is achieved largely through a commitment to a certain stock of rhetorical tropes and symbolic gestures that float almost entirely free of the party's substantive commitments. People are suckers for rhetoric, which is why merely rhetorical differentiation works at both the grocery store and the polling station. It is also why we are prone to believing crazy things about what the other "side" believes. And this leads to a rhetorical atmosphere corrosive to the trust necessary to facilitate compromises over policy that would be agreeable to most everyone. Our problem, and Mr Krugman's, is that we believe our own BS.
Basically, Mr. Wilkinson and I agree that the rhetoric is far more divided then the policy preference.