First, astroturfed corporate events would have denounced all of this as Socialism. How horrible THAT would have been! I can't imagine it!
When the Democrats threw out Richard Nixon and stood up for the rule of law, they won 49 House seats and 3 in the Senate. When the Republicans pretended Bill Clinton was a Socialist, they won 54 House seats and 8 in the Senate.
2010 is looking more like 1994 than 1974, and it didn't have to. That's why it's important that the Democrats not lose the seats of those among them who have been pointing in the right direction all along, chief among them Congressman Dennis Kucinich. If Congress had followed his lead, the wars would be over, and their architects impeached and prosecuted. Tax cuts for billionaires would be history, as would a large chunk of the military budget, not to mention corporate bailouts, and NAFTA. We'd all have jobs and homes and free healthcare, and that healthcare would cost less than what we pay now.
The Democrats can lose up to 38 seats, keep the majority, and be better off for the loss of the worst Democrats, as long as it's the worst ones that they lose. Whether they will use their committees to conduct oversight (such as by finding the nerve to subpoena BP's CEO)will be a question of some future spine implantation surgery. Whether they pass any good laws will depend on whether the Senate throws out the filibuster rule. But nothing good will happen if the best of the Democrats lose their elections.