I'll deal with the more controversial analysis step first. This was not a tsunami, it was a realignment. The majority of house seats won were in districts that McCain carried, some by large numbers. First, this means that a great deal of very motivated republicans lived in that area as a large number of republicans (this one included) were incredibly unhappy with McCain and either voted third party or stayed home. This means these seats were really just democrats borrowing seats that were obviously going to be returning to republican hands semi-quickly. The circumstances aligned so that this would not be the message or soundbytes coming from Washington insiders.
The small wave likely tilted elections that would have been close in 2006 and before. These are races like Ohio governor, PA senator, and WI senator. I am intentionally not putting on the IL senate seat as that was just a matter of the two worst candidates anyone can conceive of battling to make voters hate the other just a little more. The small wave switched votes in some of these swing states and swing areas from the democrats to the republicans and caused the races to either go republican or give the republicans a larger edge than they would have if there was not a wave underway (mainly seen in WI and FL).
This was still a refutation of some of Obama's policies. The country was realigning to the center-right. Obama's policies have not been center-right or even center, which is where he needs to end up. This is partly the republican's fault as Obama had to look to get the whole democratic party to support his bills because the republican's refused to play ball but President Obama also is a known progressive so had no problem going left on some issues. The biggest areas the President has gone left is health care (and I understand some consider this a compromise bill) and unemployment/welfare.
The real problem in the democrats is not the house seats they lost but the exit polls. The electorate that showed up said overwhelmingly they wanted the government less involved. Despite democrats saying that this is not specific enough, for voters, just chanting small government is currently enough. It will be interesting to see what happens when the new congress does not decrease the size of government (call me a skeptic). Will they give up? Create Third Party? Just keep voting Republican? No one knows. Democrats either need to get on the bandwagon of small government, create the right political situation where people are more amenable to larger government or split that voter block.
The other big issue for democrats is health care. There is no greater shift between 2008 and 2010 than health care. The voters used to trust democrats with health care 2 to 1. Now they trust republicans with health care 2 to 1. Some believe this is because Obama care is a disaster and some on the left believe that Obama just did a terrible job of selling the bill. The answer is likely both. The bill has some major flaws but Obama also did a terrible job of making the bill about some of the more popular parts of the bill. The democrats need to fix that trust gap in health care before 2012 or we will wake up to a republican president.
Conversely, the republicans need to fix their west problems. In NV, CO, and CA they lost.... bad. Losing in CO could be acceptable as the dems ran a strong candidate. Losing in NV against an unpopular senator with everyone knowing that was the big prize of the night is completely 100% unacceptable. The republicans need to figure out what went wrong, and it is far more than having a weak candidate, and fix it. CA also should have been closer. Boxer was beatable this election. Fiorina was a decent candidate but didn't come close (and lost classlessly by not conceding in a reasonable time frame btw). Even thought the republicans look good in the midwest, they should not desire to put all their marbles out there and need to fix their western problems.
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