Today, in a plush suite on the 20th floor of the Aria casino and hotel, the leaders of the Tea Party express took stock of both the new political reality they had helped create and the lasting economic reality that made it possible.

Below sprawled Las Vegas, the biggest city in the state, with more unemployment and home foreclosures than any other. Before them were the two large wall charts, flat-screen TVs and laptops on which they followed the biggest upheaval in the House of Representatives since 1948. By any standards this was a great evening for the Republican right. But it could have been better.

The Tea Party had rented the suite in the Aria so that, post victory, they could taunt the Democratic majority leader, Harry Reid, who was holding his election party in another part of the hotel. But they ended up holding a wake, while Reid was anointed anew.

For Obama, Reid's survival was one of the few bright spots in an otherwise bleak night for Democrats. The best possible interpretation he could put on it was the same one he puts on the state of the economy and almost everything else – it's bad but it could have been much worse. In many parts of the country they clung on, in others they were trounced. True, the formidable machine he had built up in 2008 to achieve his election was still intact, but the optimism that followed that election now appears to be in decline, if not terminal demise.

"We achieved it through hard work," said Marsha Kimble-Simms, who left the Reid event holding balloons and wearing a smile. "For a moment we thought perhaps we wouldn't. But we walked and called and knocked on doors. People were not as receptive as two years ago. We had to convince lots of people who had not necessarily wanted to vote that it was important."

Those on the left who feel Obama has not done enough in the first two years have little to look forward to now. This was the high watermark. Until 2012 the Democrats will have even fewer seats and their opponents are even more rightwing than they have been of late. For two years Obama expressed a desire for bipartisanship that he could not achieve and that the Republicans had no interest in. Now it will be a necessity.

But if this is a challenge for the president it is no less so for the right.

Quite where they are taking the country back to and from whom they will now take it from is not clear.

Having railed against the establishment, the Tea Party candidates who won are now part of it. The cornerstone of their agenda thus far demands cutting taxes – which will inflate the deficit even further – and undermining healthcare reform, which will be difficult to achieve. Impressive as their victories were, their Democratic opponents still have the Senate and the presidency. They have graduated from the comfort zone of opposition to the partial exercise of power. They can't do anything without co-operating with the president; and like Obama in 2008 they have been elected with great fanfare and considerable hope. Now they share the power, they will share some responsibility for the misery.

If these elections were a defeat for the Democrats in general and Obama in particular they were not a full-throated endorsement of the Republicans. Obama remains the single-most popular politician in the country and the Republicans are only slightly less despised than the Democrats. The country is evenly divided on the benefits of healthcare reform and the stimulus package. Republicans rode an anti-incumbency wave in the middle of a recession. Repulicans did not win because of their ideology; Democrats lost because of their inefficacy. Republicans now have licence to legislate; they do not have a mandate for obstruction.

Americans are fed up with their politicians. And rightly so. This was the third time in three elections that the country had kicked the ruling party out of the House of Representatives, the Senate, both, or the White House. They keep trying to change the status quo; but then it keeps coming back again.