When the current era of status-striving kicked off with the Me Generation during the 1970s, the domain of competition was the career world, which solidified into the yuppie phenomenon of the '80s. They also measure status by material things that cost enough money that owning them implies success in the career world -- a large house in a top zip code, second homes, luxury cars, boats, and so on.
As the career domain became saturated with strivers, the next generation took to the lifestyle domain for their status contests. See this earlier post. And now that lifestyle striving has become saturated, strivers are competing over who has the awesomest persona. For now we can group the lifestyle and persona strivers together, as forms of not-so-tangible striving, in contrast with the clearer measures of success in the career and materialist domain.
The political system responds to underlying sociological changes. During the Great Compression, both parties were not at war with each other as they were during the Gilded Age. They were not concerned with helping individuals advance their personal, or at most familial ambitions, but rather with stewarding the collective welfare of the entire nation. Republicans leaned more toward established business interests (not entrepreneurial strivers), and Democrats more toward labor unions (not identity politics groups, not outdoors enthusiasts).
As the Me Generation entered the electorate in huge numbers, so the party system came to be co-opted for the purposes of advancing the two camps of strivers -- Republicans representing career strivers, and Democrats the lifestyle / persona strivers. In a striving climate, the prevailing mood is laissez-faire -- no holds barred, when competitiveness starts soaring.
Republicans, as the career striver party, emphasized laissez-faire in the economy. In their appeal to voters, they came to be defined almost entirely by lowering income taxes, so that more of a career striver's income could go toward padding their net worth. Democrats, as the lifestyle / persona striver party, emphasized laissez-faire in the lifestyle and persona domains -- do whatever, whenever, with whoever. They came to be defined by breaking down barriers toward previously shunned lifestyles, as opposed to previously shunned business practices -- single mothers, homosexuals, drug addicts, and so on.
Republicans try to help career strivers with conspicuous consumption -- giving them more tax write-offs for homes and luxury items. Democrats try to help lifestyle strivers write off a symbol of their environmentalist lifestyle, like a hybrid car. They want to help lifestyle strivers go to college for free, since college is now training for lifestyle striving rather than career prep.
Where does the partisan conflict and polarization come from? With two separate modes of competition trying to establish themselves as the One True Status Contest by which all individuals shall be ranked, one has to degrade the other in importance. Sure, both career and lifestyle contribute to status, but (Republicans) career is more important, or (Democrats) lifestyle is more important.
Career strivers have enough trouble competing against each other -- if they could knock out the lifestyle strivers by persuading people that lifestyle contests don't matter, then they've just given themselves a huge, fast boost in status, with roughly one-half of the population now out of the status game. Likewise, lifestyle strivers will want to persuade people that career success doesn't matter, and suddenly they've eliminated half the population as status rivals.
But it only takes them so far to poke fun at the other camp -- Republicans belittling Democrats as "latte-sipping liberals," and Democrats painting Republicans as money-grubbing career drones.
What your side really needs to do is to demonize the other side. Playful ribbing won't shut them out of the status game -- portraying their entire approach to status competition as immoral and evil, will.
If the Democrats have based their appeal on laissez-faire in lifestyles, then Republicans will be forced to portray those changes as threats to the fate of the universe, in strongly moral terms. Championing gay marriage doesn't make you a loser in your career who's desperately trying to score lifestyle striver points by being a fag-hag -- it makes you someone who's opening up the gates of Hell.
And if Republicans have based their appeal on laissez-faire in the economy, then Democrats will be forced to portray deregulation and widening inequality in moralistic apocalyptic terms. It's not just those shallow materialist Republicans making it easier to keep their income, it's the forces of darkness breaking into our world.
Hence, the strident polarization we see today.
Republicans come to favor not only a deregulated economy, but a highly regulated lifestyle domain -- to shut down the other mode of status competition. And for the same reason, Democrats come to favor a deregulated lifestyle domain, but a highly regulated economy. This is all when appealing to voters, of course, since once in office the Democrats compromise and accept a fairly unregulated economy, and Republicans compromise and accept deregulated lifestyles. But they aren't total moves to the other side, they are just compromises, and Democrats remain relatively more in favor of economic regulation, and Republicans of lifestyle regulation.
In contrast, the Great Compression saw both parties aiming to regulate their domain of concern, which were the opposite of today's focus. Democrats focused on the economy, and pressed to regulate it. Republicans were focused on lifestyles (obscenity in pop culture, atheism, hatred of country, etc.) and sought to regulate them. Both sides accepted the regulations of the other, so that both the economy and lifestyle domains were decently regulated. Pornography was outlawed, but so were monopolistic business tendencies.
There's a lot more to be said. This post is to lay out the basic idea of looking at the two parties as the organized will of rivals pursuing two separate modes of status competition, career vs. lifestyle strivers. So much starts to fall into place once we see the parties from this point of view.