I may make a more detailed contribution to the debate soon, but for now I wanted to point out that Norman Podhoretz and others are conflating two separate issues: the first is why American Jews are generally more liberal than are other Americans, and the second is why American Jews are so attached to the Democratic Party, especially in presidential elections, such that even Jews who are moderate to moderately conservative are presumptive Democratic voters.

On the former issue, one obvious reason is that Jews tend to be much more secular than Americans as a whole, and that religious Jews tend not to be inclined to want to impose "Jewish values" on other Americans. But it's also true, and not widely appreciated, that on economic issues, at least, Jews have become much more conservative over time. Ilya has pointed out that American Jews are right in the mainstream on economic issues. This is a great change from the past. Very few American Jews were to the right of Franklin Roosevelt in the 1930s. About 1/3 of Jews in the 1930s were Socialists (including my maternal grandfather). You would be hard-pressed to find one-tenth that percentage today. A persistent myth is that most American Jewish immigrants were very religious, and only adopted radical politics when exposed to American working conditions. In fact, the most religiously committed Jews tended to stay in Europe, where they had a vast communal infrastructure. (My paternal grandfather's cousin's very religious family came to the U.S., and then, to their great misfortune, left the triefe medinah because of the lack of religiosity they found and returned home. There was one survivor.) A significant percentage of immigrants to the U.S. were young rebels who wanted to escape communal strictures. They brought their generally radical socialist politics with them.

On the issue of party identification, Ilya is clearly right that Jews fear/despise the Christian right, and that is a good part of the reason Jews are loyal to national Democratic candidates (local candidates like Rudy Giuliani have received a majority of Jewish votes). But I was surprised he didn't bring up political ignorance. In my experience, and I'm quite certain the data would back this up, American Jews tend to substantially overestimate anti-Semitism among evangelical Christians (who in fact are not any more anti-Semitic than the average, and are more likely to be philo-Semitic), even more substantially overestimate the (in fact very small) percentage of evangelicals who support Israel to hasten the end of days at which time Israel and the Jews will be destroyed. The vast majority of evangelicals who support Israel do so for other reasons.

Meanwhile, Jews substantially underestimate the level of anti-Semitism among core Democratic constituencies (among the most anti-Semitic groups in the country are African Americans, Latinos, Arab Americans, and high school dropouts, though I should add that most members of those groups are not anti-Semitic), and the hostility to Israel shown by various left-wing groups with influence in Democratic politics.

UPDATE: I should add that I'm a strong adherent to the theory that party identification among people who are not highly ideological or very interested in politics (most people, including most Jews) is at least as much a matter of cultural identification--which party represents people like me, is accepting of people like me, has active members who I'd feel comfortable socializing with, and the like--as policy-related. If Jews tend to think that the Republican Party is full of anti-Semites and the Democratic Party is not, they will tend to identify with the Democrats. Israel comes in as a cultural marker, as Jews tend to associate hostility to Israel with hostility to Jews, which is, in fact, a correlation backed up by studies showing that there is a significant correlation.