The GOP has lost its way. Here’s how it can return to its roots.

After Tuesday’s defeat, much has been written about the country’s shifting demographics and how the GOP cannot hope to win with a shrinking white male majority. But the Republicans cannot become a mini-Democratic Party. Freedom and individual empowerment have long been attractive — Republicans need to get back to them. Demographics may be destined to change, but a consistent message of individuality and privacy is appealing to all people from all walks of life.

The GOP also needs to present federalism as the powerful and liberating idea that it is. A better name might be “localism.” Setting ideology aside, the United States is now the third-most-populous country in the world; it’s vast and diverse. It is simply impractical to try to govern this expansive nation from one corrupt city by the Potomac River.

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Reagan called for the dismantling of the Great Society, along with the Departments of Energy and Education, because he believed that they didn’t work, were counterproductive and improperly seized power from individuals, local leaders and state officials. But conservative populism should not stop there. If we rightly fear all concentrations of power, then the first order of business must be to break up the five big banks. The rationale is simple: Since the banks used illicit means via lobbyists and government to acquire such power, then government can be used to undo their ill-gotten authority.

Wall Street is too fearsome and corrupt for anyone’s good. We should find a way to create 50 Wall Streets so that money can stay in the states, and corruption can be kept to a minimum and law enforcement to a maximum. In the era of the Internet — which empowers the individual — can there be any doubt that scrutiny of local Wall Streets would keep bankers and brokers on their toes?

Republicans also need to bite the bullet on Bush’s No Child Left Behind Act. It was a noble mistake, not to mention antithetical to conservative philosophy. Does anyone really believe that Washington has the corner on education wisdom and that the people of Nashville or Atlanta or Boston cannot run their own schools?

And since a national solution to immigration cannot be found in Washington, why not try a more local approach? If Franklin Roosevelt could trust local draft boards to produce the men necessary to fight World War II, would it not be possible for local immigration boards, comprising neighborhood officials, to rule with firmness and compassion on cases of illegal immigrants?

The key to a real resurgent Republicanism lies in the past. Reagan used to say: “I do not want to go back to the past. I want to go back to the past way of facing the future.”

Like Milton Friedman, conservatives need to remember that the greatest threats to individual freedom and entrepreneurship come from big government and big corporations. The first rule of the bureaucracy, after all, is to protect the bureaucracy. Fighting big government and big Wall Street will not be easy, but doing so will help pave the way for a coherent brand of Republicanism based on freedom and the individual.

cshirley@sbpublicaffairs.com

Craig Shirley, author of two books on Ronald Reagan’s presidential campaigns, including ”Rendezvous With Destiny,” is the president of Shirley & Banister, an Alexandria-based public affairs and communications firm.