First came the newspaper ads. "Retro vs. Metro" they read, featuring a head shot of Newt Gingrich (retro) facing one of Hillary Rodham Clinton (metro). Or Mel Gibson (retro) contrasted with Michael Moore (metro). The mystery of their message had people talking for a while. Turns out it was all about a book, one that purports to have the secret to a "winning strategy" for the Democrats in November.

"The Great Divide" is the self-published -- and vigorously self-promoted -- brainchild of an eccentric 83-year-old Arizona billionaire businessman named John Sperling, founder of the for-profit University of Phoenix. It suggests that Sen. John Kerry can ace the election this fall by taking advantage of a growing conflict between what the book describes as a highly sophisticated, productive "metro" economy based largely in the Northeast and on the West Coast, and a troglodyte, parasitic "retro" economy located in the South and parts of the West and Southwest.

In the book's analysis, the famous Republican "red states" of 2000 are socially and culturally regressive and economically backward. Meanwhile, the Democratic blue states are the "economic engines" of America, the incubators of new industries and bastions of financial brilliance and global savvy. Kerry's challenge, Sperling and his three co-authors declare, is to convince voters in swing states such as Arizona, Colorado and the industrial Midwest that they should get hip by becoming more "metro" and less "retro."

Memo to Kerry: If only it were that easy.

There are lots of reasons why this analysis is wrongheaded. It's based on a significant misreading of many key economic indicators. And it doesn't recognize where Americans who aspire to upward mobility make their homes. But it's easy to see why it plays with the pro-Kerry crowd: In recent years, the Democratic Party has shifted away from its working- and middle-class roots to identify more and more with the rising elites of the information age. Yet this shift could cost it an election where economic issues may still prove decisive.

Look at Kerry's chief supporters and you see a new kind of elite, a veritable "hip-ocracy" of high-tech tycoons, Hollywood moguls and celebrities, and a bevy of Wall Street financiers. This group is bolstered by Americans with graduate degrees and a growing number of college and university faculty members.

These core Kerry constituencies, the technical and professional intelligentsia, increasingly show signs of seeing themselves as a new social elite, what urban guru Richard Florida has anointed as the nation' s "creative class." Most make their homes in the peculiarly elitist economies of post-industrial metropolises such as greater Boston, Manhattan, San Francisco and the west side of Los Angeles, where the definition of middle class often comes with a million-dollar-plus mortgage, a PhD and, often enough, more than a few pence handed down from the parents. Kerry, a Yale graduate identified by Burke's Peerage as having more royal blood than any presidential candidate in U.S. history, educated in Swiss boarding schools and married to his second heiress, is an almost-too-perfect representative of this new class.

Bush, of course, isn't exactly from the wrong side of the tracks, and he has more than his share of corporate backers. But they're mostly from the more established business community. The Democratic elites see themselves as in many ways smarter and much "hipper" than these good-old-boy business elites of Dallas, Houston or Atlanta. Their collective self-image fits right into the retro/metro analysis.

But the assertion that the "retro" states represent the economic past is a vast, and dangerous, exaggeration. Wyoming and Mississippi may still be backward, but it's absurd to write off North Carolina, Georgia and Texas as technological laggards.

The days when the economies of these places depended on oil depletion allowances and farm subsidies is long past. Texas today is the nation's second most important high-tech state after California, having long ago blown past the likes of Massachusetts. More importantly, since the dot-com crash of 2000, the "retros" appear to be gaining ground, with both high-tech and business service jobs heading to the South, the Great Plains and cities like Phoenix. Meanwhile, many of the bluest places on the map -- the San Francisco Bay area, Portland, Ore., and New York City -- have suffered the biggest job losses.

Most revealing is a huge and longstanding shift among educated workers, particularly young families. Many are moving out of the blue states in pursuit of the better economic conditions in the scarlet ones. Between 1995 and 2000, according to Brookings Institution demographer Bill Frey, among the largest net receivers of college-educated migrants have been such nominally "retro" places as Florida, Georgia and Texas.

Nowhere have these trends been more pronounced, and less reported, than in Kerry's home state. Back in 1988, Michael Dukakis used his state's "Massachusetts miracle" -- its rise from industrial also-ran to high-tech bastion -- to help him win the Democratic nomination. Today, Kerry and many others still cite the Bay State as a case study in success.

Yet Massachusetts is very different now from what it was in Dukakis's day. Since 2000, the Boston economy has been among the worst in the nation in terms of job losses, many of them in higher-end business service and technology fields. Since 2002, nearly 40,000 Boston area residents have left the labor force. The city itself, after enjoying a small population gain in the 1990s, has been losing residents since 2000.

Overall, notes Michael Goodman, an economist at the University of Massachusetts's Donahue Institute, the state is hemorrhaging young middle-class families -- largely to "retro" states such as Florida, Georgia, Texas and North Carolina, as well as neighboring low-tax New Hampshire.

Yet the Kerry camp and the Democratic Party leadership seem unruffled. In most of the country, such developments might have local elites in a state of panic. In the Bay State, though, the loss of middle-class families "is not defined as a problem," says Goodman.

This, suggests Doug Fisher, head of economic development for Northeast Utilities, a regional power company, is because things are generally jim-dandy for the hip-ocracy who now dominate the state's Democratic Party. Today, New England elites talk not about new jobs and opportunities, but about how rich those who can still afford to live there are becoming. The soaring housing prices chasing the middle class out of the state have proven a huge windfall for the Harvard professors who bought their homes a decade ago. "The real argument here is between jobs and income," suggests Fisher. "We still have plenty of money, and that's all that people think matters. We are becoming an economic-development cul-de-sac, and a lot of people like that."

Although the number of Massachusetts natives earning associate and bachelor's degrees has been dropping, there are still plenty of wealthy people around the world willing to pay huge bucks to get their offspring into Harvard. Not surprisingly, Harvard faculty are the second-largest source of direct campaign funds from employees -- behind the massive University of California faculty -- to the Kerry campaign, according to the Center for Responsive Politics in Washington.

The economic attitudes of these intellectual elites may help explain why the Democratic Party today can no longer do a convincing job of "feeling the pain" of the middle class. It also suggests a disconnect between the Democrats and those very places where Americans now go for opportunity.

It's possible that younger educated workers moving to "retro" country will import "metro" values and expand the blue areas into the red countryside. This is already happening in places such as Raleigh-Durham and Austin. Yet for every one of these much-ballyhooed pockets of retro-state sophistications, there may be many others that are filling even more rapidly with a different population. Even in Midwest "swing states" such as Ohio, the counties gaining population are peripheral suburbs, places where both the newly affluent and the lower middle class are heading. These areas, according to demographer Frey, have been adding population over the past three years at a rate of 2 percent annually, compared with virtually no growth in the established metro areas and even declines in the urban core. Most are solidly, and increasingly, Republican.

But it's not on purely economic issues that the Democrats fail to reach such voters. Suburban dwellers in states from Maryland to New Jersey to New Mexico increasingly see liberal politicians criticizing precisely the places where they are moving. Democrats want to attack suburban sprawl with policies that often drive housing prices out of reach. Look at Portland, Ore., where highly touted "urban growth boundaries" have by many accounts raised housing prices so high that people are fleeing across the Columbia River to Washington state.

In Albuquerque, some city leaders, chiefly Democrats, recently proposed discouraging front garages and backyards -- centerpieces of the middle-class American dream -- in future developments, hoping to further limit new growth of cheaper, "sprawl"-like housing in the largely Latino and working-class city. As a result, most jobs and many upwardly mobile people have been migrating beyond city limits to sprawling, less picky places such as neighboring Rio Rancho.

If the Democrats want to keep the "party of the people" label, they shouldn't be furthering policies that make it harder for people to fulfill the dream of owning a house -- with a yard and decent schools -- in the name of the environment or of preserving "authenticity," both frequently cited by anti-sprawl politicos. They would do well to remember the New Deal. Franklin Roosevelt and Harry Truman may privately have thought industrialized cities and dustbowl towns were crummy places to live, but they still fashioned their economic appeals to people who lived there.

Democrats could think about offering a muscular economic policy that deals with the real problems suburbanites face -- crime, increasingly congested roads, lack of vocational education for the children who won't be attending college but aren't destined for jail. And most of all, they could address the reasons -- the lack of decent schools, middle-class housing options or the erosion of middle-income jobs -- that are driving so many Americans to the "retro" states or leading them to desert the blue cities for the redder outer suburbs.

Ultimately, the answer to the Democratic Party's democratic deficit won't be found among the dons in Cambridge, the patricians on Beacon Hill or the celebrities in Malibu. It will be found in identifying and understanding the strivings of middle-class people living in unfashionable tract suburbs, working-class city neighborhoods and small towns across the country. Until the Democrats find a way to connect with these people, they will find their own fortunes receding in the face of an enormous field of opportunity.

Author's e-mail: jkotkin@pacbell.net

Joel Kotkin is an Irvine Fellow with the New America Foundation. He is the author of "The City: A Global History," to be published by Modern Library early next year.