While the Democratic party publicly denounced its grassroots opponents of the bailout as reckless radicals, grassroots anti-TARP organization on the Republican side attracted the support of financiers, leading to the Tea Party, which is neither purely grassroots nor Astroturf. Since its formation, it has prompted larger voter participation on the right while Obama's many foot soldiers watched in disappointment as his sweeping rhetoric made way for his Wall Street-friendly policies, which during his campaign were never a secret to those who paid attention (or read Piri' Miri Muli').
Where this could be seen as a boon for the GOP in the mid-term cycle and will lead to legislative gains, Tuesday brought with it structural changes in the party that threaten to alienate it from mainstream opinion, even if it resists the nomination of a Tea Party-endorsed presidential ticket.
Where there is agreement amongst Tea Partiers on TARP, there is disagreement on whether to wage foreign wars, which, absent of a credible provocation, increasingly are justified to the Republican base as religious wars. This divide will be made visible if, say, Mike Huckabee, a promoter of religious war who has declared the TARP issue to be the primary litmus test of 2012, faces off against a rejuvenated anti-war libertarian like Ron Paul or Gary Johnson. It is Huckabee, however, who can promote his militarism on FoxNews with a 20% base of support and a lead in the Iowa Caucus to build on.
Huckabee was out of the race when the financial crash was reported, while Sarah Palin, another pro-war Tea Party standard-bearer, was on McCain's ticket and therefore instructed to support TARP, before losing the race and then “changing her mind.” Newt Gingrich, who came out swinging early against TARP, changed his mind, presumably in deference to McCain. Mitt Romney, not known for consistent opinions based on convictions, seems to summon both consistency and conviction when it comes to his support for insulating the financial industry from risk, a conviction which figures to lose him support during his next round of squandering the family inheritance. Tim Pawlenty, angry that he was passed over for VP, has had the liberty to formulate a well-nuanced position on TARP, palatable to both Tea Partiers and investors that originally gave Hank Paulson the benefit of the doubt, but has the low name recognition that comes with being passed over for VP.
It is likely that the field will be winnowed in the form of a Tea Party sub-primary (between Huckabee and Palin) and a Blue State sub-primary (between Romney and Pawlenty, plus Gingrich, who, despite being from Georgia, came out ahead in a May poll in fiscally conservative, affluent California). Romney is the front runner in New Hampshire and it will be difficult for any other relatively moderate Blue Stater to keep him from undercutting their support as they try to compete against the Tea Party. Palin doesn't benefit from TARP and her name recognition is so high, her levels of approval and disapproval so entrenched, that each percentile increase of support becomes more and more difficult.
If TARP is indeed the primary litmus test two years from now, and the Tea Party continues to have an organizational advantage, Huckabee emerges as the front runner. His numbers have recovered from the November 2009 nose dive after a criminal whose sentence he commuted opened fire on cops in a coffee shop. It is difficult to predict Ron Paul's support if he runs in such a Tea Party-friendly environment – one presumes it would slightly exceed previous levels but it could really be anywhere on the chart.
The general election thus becomes another choice between the status quo and the possibility of expanded religious wars, a menacing possibility that hovers over the picture of benign mayhem painted by the Republicans' predicament this week. Even amid the momentum of the GOP in legislative elections, though, Obama has held a steady lead against candidates with high name recognition. An economic recovery would sweep him into reelection; a slow or absent recovery would benefit an opponent with a viable economic alternative, but no such alternative appears to be forthcoming from the field of likely candidates.