Carl Paladino stood at the victory podium and bellowed: "Tonight the ruling class knows. They have seen it now. There is a people's revolution." Paladino, the Tea Party-backed candidate whom New York Republicans nominated for governor on Tuesday, crushed his establishment opponent – a former congressman with a somewhat moderate reputation – by two to one. This was after a campaign in which he went round the state with a pit bull at his side, tried to bury his opponent in demagogic rhetoric about the proposed Manhattan Islamic centre, and likened the Democratic and Orthodox Jewish speaker of the state's lower legislative chamber to Hitler.

Within the Tea Party movement, a group that has about as many Jews as an average al-Qaida meeting, such antisemitism was not judged a terribly great offence. In other respects, though, Paladino is an unlikely vanguardist in this revolution against the state: he's a multimillionaire real-estate mogul who makes at least $10m a year leasing office space to various state agencies. (The government is good for some things after all, I guess.)

It is unlikely Paladino will defeat Democrat Andrew Cuomo to actually become governor. But he typifies what's going on in the Republican party this year, a process that gathered steam on Tuesday with Paladino's win and Christine O'Donnell's victory in Delaware. She is the eighth Tea Party insurgent to defeat an established Republican in a Senate primary this year, and her win has set off an unprecedented feud between Karl Rove on the one side (who at first said she can't possibly win in November, before rowing back from that the next day) and Rush Limbaugh and Sarah Palin on the other (who say she can win).

Democrats have spent the week rejoicing over O'Donnell's victory. The recent media narrative has been that the Republicans may not only take control of the House of Representatives – which is essentially a conventional-wisdom given – but of the Senate, as well. Winning in Delaware was a necessary ingredient of that mix, so that talk has been stopped cold for the time being.

But the larger question is where the Tea Party is going and how profound its long-term impact will be. The optimistic answer is that if it gets mixed results in the midterms this November, the economy improves, and Barack Obama's approval numbers go back up above 50% while Sarah Palin's act starts wearing thin, then 2010 will prove to be the Tea Party's zenith.

At the other extreme, the most worrisome possibility goes something like this. This tendency has always existed in the US. In the early days of the republic they were the anti-federalists. Their base was in the south, as it is still, but they were everywhere; and while they didn't necessarily oppose union (that is, creating an entity called the United States of America), they wanted the loosest possible affiliation among what were then called "the several states".

They had the habit of losing a bunch of elections to federalists of various sorts. They brought on the civil war (and you should watch the American readers thrash out this sentence in the online comments!). Their side lost, and then they were really tamed – the south was essentially occupied. Before you know it, the 20th century had arrived, with urbanisation and industrialisation and Wall Street replacing the City of London as the home address of world capital and the US's rise to global power.

Then came the cold war. Vast power became concentrated in Washington. Domestically, the great moral cause of racial equality provided the perfect basis on which to give Washington still more power to enforce that equality, because many states would not. All this time, the proto-Tea Partiers were surrounded and outnumbered, and held their tongues.

Yes, the Reagan years were fine for them, and the George W Bush years. But let's face it, the Obama years are their heyday. It took economic calamity, large government bailouts, and perhaps most of all a president who is so utterly alien to them – and who embodies American ruination and turpitude just by standing there – for them to rise up as one.

Thus the historically situated question is this: is the Tea Party movement a flash in the pan, or is it a historic fulfilment of an urge that has been building for 230 years and is on the cusp, with the help of Rupert Murdoch's "news" channel, of becoming a permanent fixture in American politics?

If most of those eight candidates lose on 2 November, the more establishment Republicans will attempt to rein in the movement. Whether they can do so is another question. Meanwhile the Democrats now have an opportunity, in a year that has largely been bereft of them, to make the Beltway politics chatter focus on the other side's problems, rather than their own. Democrats have a tendency to play by the old rules. One old rule of politics is that when the other side is shooting itself in the foot, do nothing – just stand back and watch.

But we are in a new media and political environment. In fact it's not even new any more. It's been around for 15 years, but still Democrats think the old rules apply. One old rule is, don't respond to nutty allegations because you only give them oxygen. Well, Democrats have spent two years not responding as "birthers" spin their conspiracies about Obama, and the result is that between 20% and 25% of American adults doubt that the president is a genuine American.

So I propose a new rule: when the other side is shooting itself in the foot, stand close by and keep handing out bullets. Democratic strategists should be thinking of fresh ways to demonstrate to the American people that these Tea Partiers are not the sons and daughters of John Adams but people who stand almost entirely outside the country's best mainstream traditions.

Republicans like Rove will have to spend the next several days explaining why the Grand Old Party is not being taken over by the Tea Party movement. Democrats need to say that the movement is merely a logical culmination of the stroke-the-hardcore-base party that Rove created. Now, like Doctor Frankenstein, he doesn't like the monster raising himself from the table, but it's a little late for that. If the Democrats are smart and aggressive – always two big ifs in American politics – Paladino's revolution may yet sputter.