3) A conflict of conscience on economics. Southern Democrats dealt with the moral conflicts in the party through the 1970s and 1980s with little to no issue, in large part because Southern working whites felt and knew that their local and state Democratic Parties (and even the national party to a large degree) had their backs when it came to their bottom line. Once national Democrats embraced neoliberalism and concepts like NAFTA, though, it was the last straw. Although probably not consciously, Southern white working Democrats came to a collective conclusion: "I didn't agree with Democrats on the moral issues, but I agreed with them on the economics. But today, they're acting like immoral heathens on social issues AND now like Republicans on economics? There's no difference between the two when it comes to my bottom line, so I'll vote my morals from here on out". Running to the right on economics had the opposite effect that was intended; Democrats keep thinking they'll win the South back by acting like Republicans on economics; what the working South really wants, deep down, is a populist (dare I say socialist) approach to governance, but they think they don't because that is part of the uniform message that is sold with the Republicans' relatively new "moral argument" ("God hates socialism").
Couldn't have hit it on the head better. Neoliberalism is the cancer that is killing the Democratic Party, and the South is the microcosm of what this cancer has done to its electoral chances. I would know - that's why I left it.
