The Democratic and Republican Parties have undergone a long transition from their founding ideological principles. The Democrats started out as the conservative party but are now the liberal party, and the Republicans were once the liberal party but are now the conservative party.
The Democratic Party we know today evolved from the conservative Democratic-Republican Party of the 1790's. The first contested Presidential election was in 1796. The Democratic-Republican Party nominated the conservative Thomas Jefferson as their first presidential nominee. Party members were anti-federalists who favored state sovereignty, free markets, a decentralized federal government, and an originalist interpretation of the U.S. Constitution and the attendant Bill of Rights. The Democratic-Republican Party also supported the institution of slavery.
Democratic President Martin Van Buren presided over the panic of 1837, and during that time he was steadfastly opposed to using the government as a means of employing workers on public works projects. In fact, during this economic depression Van Buren literally sold the federal government's tool supply so that the government could not use the tools for public works projects. This ideological mindset is diametrically opposite of the economic stimulus proposals that contemporary Democrats now support and advocate for, especially during periods of economic morass.
Similarly, the Republican Party has also experienced significant ideological alterations. Founded in 1856, it was the liberal counterweight to the conservative Democratic Party, opposing the expansion of slavery, supporting more money for public education, and advocating a more liberal immigration policy.
The original liberal bent of the Republican Party is especially evidenced by the 1888 Presidential election where Republican Benjamin Harrison was elected President by advocating a liberal platform. He favored expanding the money supply, expanding the protective tariff, and allocating munificent funding for social services. Harrison lost his re-election bid in 1892 to Democrat Grover Cleveland, who advocated a conservative platform, including maintaining the gold standard, reducing the protective tariff, and supporting a lassie faire approach to government intervention in the economy.
Then in 1896 as the country was mired in another depression, there was a move afoot in the Democratic Party to abandon the conservative orthodoxy of Van Buren and Cleveland, and to undertake a radically different ideological approach. To the chagrin of the Democratic high command, the party took a leap of faith when it nominated the 36-year-old firebrand populist William Jennings Bryan. Nicknamed "The Great Commoner," Bryan advocated a liberal platform. He opposed the gold standard, advocated an interventionist role for the government in the economy, and supported an expansion of the money supply. He was the first liberal to win the Democratic Party Presidential nomination. This represented a radical departure from the conservative roots of the Democratic Party.
In response to the nomination of Bryan by the Democrats, the Republican Party countered by straying away from its liberal beginnings and nominating the moderate-conservative Ohio Governor William McKinley, who, like Harrison, was a proponent of a strong protective tariff, but who, unlike Harrison, favored the Gold Standard. This incensed many old-line progressive Republicans. Some even defected to the Democratic Party to support Bryan. McKinley won handily and was re-elected in a rematch with Bryan in 1900.
The paradigm of the Democrats being the center-right party and the Republicans being the center-left party remained for much of the nineteenth century. However, this all changed when the Democrats nominated William Jennings Bryan, ushering in a transitional era where both parties had a significant liberal and a significant conservative bloodline.
Nomination battles within both parties were usually battles between conservative and progressive wings of each party. In 1912, the Progressive former President Theodore Roosevelt challenged the more conservative incumbent President William Howard Taft for the Republican Party nomination. Though Taft won just one primary, Massachusetts, he garnered the Party's nomination by winning enough delegates at the Republican National Convention in Chicago. Roosevelt, who won nine Republican primaries, bolted the party and formed the Progressive Party, a.k.a. the Bull Moose Party, and won 86 electoral votes in the General Election. Taft won just eight Electoral Votes. The Democratic nominee, New Jersey Governor Woodrow Wilson, mustered 435 Electoral votes and won the Presidential Election in a landslide victory.
Similarly, in 1924 there was opposition from the progressive wing of the GOP when conservative Calvin Coolidge pocketed the Republican Presidential nomination. Coolidge, who assumed the Presidency on the death of Warren G. Harding in 1923, was challenged for the Republican nomination by U.S. Senator Hiram Johnson (R-CA). Johnson defeated Coolidge in the South Dakota primary, but failed to garner much electoral traction. With the Democrats also nominating a conservative, John W. Davis, disgruntled Progressives in both major parties deserted their nominees and supported the newly formed Progressive Party, which nominated Republican Robert M. La Follette Sr. for President and Democrat Burton Wheeler for Vice President. The ticket won a formidable 16.6% of the popular vote. Twelve liberal Republican U.S. House members supported the La Follette Candidacy and were expelled from the Republican caucus by conservative U.S. House Speaker Nicholas Longworth (R-OH).
Liberals and conservatives had an uneasy cohabitation in both parties. In the South, opposition to Lyndon B. Johnson's Great Society emanated from what came to be known as "the conservative coalition," consisting of conservative (mostly Southern) Democrats and Western Republicans.
In their 1976 bid for their respective party's nomination, Republican Ronald Reagan and Democrat George C. Wallace fought for the same conservative voters. After Wallace lost the Democratic Primary in Florida and his chances at securing his party's nomination were dim, the Reagan campaign ran an advertisement urging Wallace supporters to cross over and vote for Reagan in the Republican Primary. A voter appearing in the advertisement intones: "I've been a Democrat my whole life, a conservative Democrat. As much as I hate to admit it, Wallace can't be nominated, Ronald Reagan can."
Since that time, there has been a gradual ideological homogeneity within both parties. Conservative Democrats and Liberal Republican were either defeated for re-election, retired from office, or became Republicans.
Over the last decade we have witnessed the near end of progressive Republicans. This is evidenced by the defeat of U.S. Representatives Connie Morella of Maryland and Christopher Shays of Connecticut, and by the egressing from the GOP of former U.S. Senators James Jeffords of Vermont and Lincoln Chaffee of Rhode Island, both liberal Republicans.
The final nail in the coffin for conservative Democrats occurred in 2010 when the three most conservative Democratic members of the U.S. House of Representatives (Bobby Bright (AL), Walt Minnick (ID), and Gene Taylor (MS)) lost their re-election bids. All three representatives voted against President Barack Obama's Stimulus Plan, the Cap-and-Trade legislation, and the Health Care Reform package.
With the stock of liberal Republicans and conservative Democrats nearly depleted, the Republican Party is now the conservative party and the Democratic Party is now the liberal party. This is an ideological reversal. The U.S. now mirrors many parliamentary systems in that the ideological outliers are de-minimis. Outliers who get elected are also usually the most electorally vulnerable in that they invariably represent states and Congressional districts inhospitable to their party's ideology. The Republican Party, once the liberal party is now the conservative Party. The Democratic Party, once the conservative party is now the liberal Party. The ideological role reversal is now complete.