It’s very hard to find an economist even in the same league of optimism as my almost-always-upbeat friend, Brian Wesbury.  But if there is such a person, it would have to be Larry Kudlow, CNBC’s champion of capitalism and liberty.  Not considering myself a born optimist, I therefore find it a pleasant and unusual opportunity to out-optimist Mr. Kudlow at least one time.

In his note yesterday for National Review entitled “The Washington Tax Attack Marches On“, Kudlow wonders aloud: “Again, what happened to the tea-party call for limited government, limited spending, and limited taxation? That’s what I want to know.”

I didn’t quite understand where Mr. Kudlow was going with this question; I thought he might have meant that he saw a lessening of the intensity or diversion from key principles by Tea Party groups, either of which would greatly concern me, so I asked him if he could clarify.

Mr. Kudlow did me the honor of replying. I haven’t asked Mr. Kudlow for permission to quote him, though I presume he wouldn’t object.  Still, allow me to summarize what I think he said he intended by his words: That the Republican Party can win big in November (and then use what power they acquire to stop the Obama onslaught against capitalism) but only if the GOP sticks to acting in the spirit of the Tea Party’s message.

Larry Kudlow is too busy for me to engage in discussion over relatively minor questions in rhetoric so I didn’t pursue it further with him, but what I gathered from his words is that he thinks the GOP will not take back control of the House in November if they don’t act in the spirit of the Tea Party now.  If my inference is wrong, the error is entirely mine.  (It could be that he meant that if the GOP takes back power, it won’t matter unless they stick to policies which mirror the message of the Tea Party.)

In any case, I’d like to use this opportunity to express unusual (for me) optimism. 

A Gallup poll released yesterday shows a 20-point advantage of Republicans over Democrats among the most enthusiastic voters, i.e. those people most likely to vote.  Furthermore, separate from enthusiasm, the only age range (based on the 4 Gallup age brackets) in which Democrats lead Republicans is among the youngest voters, i.e. 18-29, namely the voters least likely to turn out in November. Meanwhile, in the last few days in political betting at Intrade.com, the chances of the GOP taking back the House are hovering around life-of-contract highs at around 48%, having briefly and for the first time traded over 50% less than a week ago.

This is all great news for the GOP in the macro, but the mood is as much anti-incumbent as anti-Democrat.  This means that Republicans and conservative-leaning independent voters are not just looking to vote for Republicans in November but to throw out big-government-supporting RINOs in the primary elections.  In other words, the GOP will probably do well in November even if their behavior now is suboptimal in part because some suboptimal Republicans will have been replaced by apparently better ones.  Now I’m not saying that the GOP can suddenly start acting the same way they did during George W. Bush’s second term, i.e. behaving so that comparing their fiscal recklessness to drunk sailors is an insult to drunk sailors, and take back the House.  But that’s not what’s happening. 

With health care and at least the first two test votes to invoke cloture on the filibuster of Chris Dodd’s horrendous financial regulation bill, Republicans have stayed united.  Not one Republican in either the House or the Senate voted to pass the final version of Obamacare and not one Republican Senator has yet caved in on the Make Bailouts Permanent bill put forward by Dodd and Harry Reid.  This is not the GOP of recent years, even if I do expect them to eventually succumb to the ill-conceived desire for “bipartisanship” sometime soon.  This means that voters will likely stay enthusiastic all the way until November.  Another measure: Even though it’s only been just over a month, the public’s antipathy toward Obamacare is not waning.  The most recent Rasmussen Poll showed 58% supporting repeal, tied with the high water mark for that question.

Voters want the GOP to represent the values of the Tea Party; they know the Democrats will never do so.  Therefore, to the extent that the Republican driftwood does indeed drift, or even to the extent that a current Republican congressman or senator is suspected of drifting tendencies, they stand a strong chance of losing in the primaries despite the enormous advantages of incumbency.  One need look no further than Utah’s Bob Bennett to see a Republican extremely likely to be replaced by another Republican soon.  Even John McCain, despite his attempt to refashion himself as a conservative, is barely leading former Congressman J.D. Hayworth, a guy who’s not an enormously appealing candidate in his own right.  (Remember, Hayworth lost as an incumbent in 2006, not in the 2008 bloodbath.)

Voters desperately want a bulwark against the socialism/fascism and general economic ignorance and incoherence we’re getting from the Obama Administration.  This means they want the GOP to have the majority in at least one house of Congress and they want that GOP to be made up of people with substantial Tea Party-style emphasis on low taxes, limited government, and increased opportunity for the free market and the American entrepreneurial spirit to jump-start the economy.  Any Republican who can’t make a strong case that he or she is such a person could draw a substantial challenge in a primary because voters are finally looking at the big picture and seeing what needs to be done.

That was a long way of saying that if I’m reading Larry Kudlow right that he worries about a not-quite-Tea-Party-enough GOP over the next several months leading to a poor showing by the GOP in November, then I am, for once, more optimistic than perhaps the most optimistic man on television.

Ultimately, the 2008 election was to a large degree about Barack Obama, and secondarily about the GOP.  It was hardly at all about Democrats other than Obama; they just rode on his coattails.  This time, the election will to a large degree be about Barack Obama and secondarily about the Democrats in Congress.  It will hardly at all be about Republicans.

In other words, 2008 represented voters screaming against something, at least as much as for something. Sure, many people voted for Barack Obama, but a majority of voter motivation for congressional elections was simply to get rid of a GOP which had become part of the problem.  2010 will also represent a protest vote. But it will be larger and more devastating than any Democrat (and even most Republicans) thought possible, particularly so soon after the “historic” victory of our current president. The fact that this will be a protest vote against Democrats means that the behavior of the GOP is barely relevant to the election outcome.  Again, they can’t become the GOP of recent years and expect to do well, but anything close to what they’re doing now will be enough.
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I would bet…in fact, I have bet…that the GOP will retake a majority in the House in November. There’s a decent chance of taking the Senate, too, especially if Mr. Rossi decides to challenge Patty Murray in Washington State. A bigger question for me is whether Tea Party groups will stay active in pressuring Republicans after the GOP has a majority – indeed, after a Republican becomes president – trying to keep them from drinking the same corrupting Potomac kool-aid which destroyed the Republican brand in the last decade.