Dear David. You wrote "Conservative ideas -- our founding principles -- are still salable". This is the main problem! The old capitalist model serves the elites. Most people benefit more from food stamps and Obama phones than helping the wealthy get wealthier.
Republicans need to fix the old capitalist model to vastly expand the opportunities for the poor and middle classes to create wealth through their own efforts rather than through socialist redistribution policies.
The changes needed to update capitalism for the 21st century are not difficult and don't cost a dime. Face the issue and republicans can find a solution that works for all races and genders.