Why Kerry Lost: Kerry lost because people didn't like him. They didn't like him because, try as he might, he wasn't very likeable. He's always been a pretty hellacious buzzkill. He wasn't my first choice -- I went for Edwards in the Caucus -- but I saw the part of him that was quite admirable. He just isn't the guy you want to eat barbecue in your driveway with.
Bush is hard not to like on a purely personal level. And he managed to sell the 'Horton the Elephant' pitch based on that liekability. "I meant what I said, and I said what I meant, an elephant's faithful, 100 percent." He really has connected with people; even if he is giving an unemployed truck driver in Grand Island, Nebraska a reaming with his economic policies, that truck driver feels that if he sucks it up and figures out a way to keep on going, that Bush will love and respect him for it.
People vote their emotions, not their political convictions. Bush was able to build a narrative that resonated with people. Unfortunately he mostly inflamed people's worst tendencies as well as their best ones. Along with a gut deep flag waving patriotism, you get a contempt for the grey-area quibbling of the other half of the country. Along with a appeal for the compassion implicit in people's religious faith, you get the inflaming of prejudice against homosexuals. He defines a well lit, sharply focused world view admits no ambiguity, and make folks welcome there, if they're willing to buy the dream.
People LIKED it that he didn't feel like he's made any mistakes. The only mistakes he admitted to was of hiring people like Richard Clark, who in his eyes betrayed the President's loyalty, Well, Richard Clark is a tremendous buzzkill himself. It's way easier to kill the messenger than to incorporate his uncomfortable facts and viewpoints into your incompatible worldview.
And if you wan't to know in simpler terms why Kerry failed, look at all the attacks that Bush and Cheney hammered him with. They said the same thing over and over again all year, and it stuck.