How powerful are the Libertarians?

Some comments on Rod Dreher's blog got me thinking:

I predict that the GOP will go more libertarian, a la Giuliani, because libertarianism is a more natural fit with autonomous individualism (in fact, it's the purest expression of it), and it offers no significant opposition to corporate interests.

How powerful are the libertarians within the Republican party anyway?

• Powerful enough to press for laissez faire capitalism, but not powerful enough to shut down corporate welfare.
• Powerful enough to reform welfare, but not powerful enough to end it.
• Powerful enough to make noise on a lot of issues, but not powerful enough to do much about them.

Many experts are predicting another shellacking for the GOP in 2008. I agree. It won't be pretty if you claim the elephant. I'm seeing the Republicans do two things wrong in their attempts to become relevant again. The first is denying the social conservatives a place to be. Like it or not, many, many people will refuse to vote for a candidate that is pro-abortion. If Rudy Giuliani is nominated, the GOP will lose a large chunk of their base to either not voting, or possibly the Constitution Party. The second error that I see the Republicans committing is what looks like a refusal to clean the house of even the most egregious offenders in the pork schemes. Would that all the Presidential candidates be like Dr. No. The combined result of these two errors is alienating the entire base, both fiscal and social conservatives. It doesn't matter how much reaching out you do, if you go so far as to lose the base, all is lost.

What can be done to fix it? I wish I knew. I do know that one thing that is needed is shoring up the base. When the President, the leader of the party, abandons a socially conservative primary challenger in favor of a seated Senator whose loyalty to the cause is dubious at best, it's not a good place for the party to be. Looking back on my experience with the grassroots, most of them (us?) have their hearts in the right place. Sometimes I wish for closed primaries. I wonder how that would affect things like this?