Kasich says if GOP doesnt evolve he will leave it

[Gustaf]

the republican party is going to be competetive again if people like kasich...who are pretty right-wing....are center-of-the-road-favorites for the post of candidate.

Yes, the GOP needed moderates like Ronald Reagan and the Class of 1980 to save it from oblivion after their 1974-76 losses.

Trump is NOT a "movement conservative", he's not an "Estabishment Republican", and he doesn't fit into any position mold the GOP has.  Yet he won the nomination by being different.  I believe that Trump, for whatever he has done or will do, has brought to an end the "You're a RINO!" process that was supposed to result in the coronation of Ted Cruz this year.  Big Government Conservative Protectionists nominated Trump, and they are a MAJOR constituency in the GOP.  And they're not going to meekly accept future nomination processes where the choice is one of who's the free-est trader, free-est marketer, lowest taxer, smallest governmenter, etc.  Trump's nomination exposed the fact that the GOP is NOT a "small government" party, and one of the results of this is that folks like Kasich (who is more in line with Trump on issues than with "movement conservatives"; his opposition to Trump is purely personal) will fare better in future Presidential nominating contests.

There's one small issue with this: where do the liberal Republicans go? The business-friendly, but (relatively) socially moderate ones who got behind Romney, for instance? Do they become Democrats? Libertarians?

There are no "liberal" Republicans any more then there are any "conservative" Democrats.  There are no Jacob Javits/Ed Brooke types in the GOP, nor are there any James Eastland/Harry F. Byrd figures in the Democratic Party. 

There are Bill Weld-type Republicans who are socially liberal, small-government types.  Over time, they will become Democrats, much as TheShadowyAbyss has.  It would be a rational choice; the Democratic Party under the Clintons, then and now, has embraced a combination of social liberalism and Wall Street-type economic conservatism that these folks are comfortable with.  And the Democratic Party will accommodate them. 

At the same time, many working class Democrats who are supporting Trump will become full-bore Republicans.  Many have already, but there are a number in the Rust Belt that will switch to the GOP due to agreement on social issues, immigration, and trade.  How much of this happens will depend on the degree to which the GOP actively opposes the sort of Globalism that has shafted these folks.

Of course, the GOP, itself, doesn't get it.  I'm watching Maria Bartiromo and Jim Nicholson on FOX right now, and they're talking about how unions won't allow the VA to fire people, how it's like the schools, where prinicpals can't fire "bad teachers" and put "the best players on the field".  The middle class was built on a social contract that offered a degree of stability to folks who worked hard and faithfully.  Is a job, or a career, really a matter of trying out for the varsity team every year, and getting cut when you're not as good as the kid who moved in from another district and is a step faster?  Or the coach's son/daughter?  Trump gets this more than the rest of the GOP, and, in no small measure, it explains some of the disconnect between Trump and the Social Darwinists who have taken the GOP to defeat repeatedly.

The bolded part is obviously not true. Kasich lives in the real world and Trump does not - they are very far apart on most issues. The crazy conservatives are just as crazy as ever - what Trump has shown is simply that most of them aren't really conservative, they just use a rhetoric to cover up a nasty, angry racism which is their main driver. Kasich doesn't seem like he will want to speak to that so he has no chance to win anything. 

The problem for the Republican party is that its primary process is dominated by a base of angry, crazy fascists that constitute a minority in a general election (and a shrinking minority at that). It remains unclear to me how exactly they're gonna fix that.