...or, Why the Whole Close-Loop Debate Mattered. What if:
Many senior Republicans actually believe that tax cuts all pay for themselves (and that the Bush tax cuts in particular increased government revenue);
The Republican establishment actually believes that there's a huge Tea Party surge based on dislike of insiders, and that therefore candidates such as Rand Paul and Sharron Angle should be welcomed, not opposed;
The head of the GOP Senate election committee actually believes that George W. Bush is now gaining popularity.
All sorts of Republican leaders actually believe that Tea Party activists are mainly self-starting and self-sustaining former Barack Obama supporters.
The immediate electoral relevance of the big epistemic closure discussion wasn't whatever difficulties it causes for Republicans as far as developing policies for the future; it's that people in a position to make decisions may be removed from reality and make foolish mistakes as a result, costing the GOP seats in Congress.
Do we know if this is true? Nope. It could be that Mitch McConnell actually knows the truth about the Bush-era tax cuts, and is just spinning; it could be that national Republicans realized that Angle and Paul were disasters for them, but had various other reasons for going along (yes, they're disasters for the Republicans; even if they win, they're going to drain resources that could have been used elsewhere had mainstream conservatives been nominated and won easily).
Do I think it's true? Granting that this is basically speculation...yup. I think the odds are very, very, high that John Cornyn and Mitch McConnell keep Fox News on wherever they're hanging out. They talk to people who get their news from FNC, from Rush Limbaugh, from conservative blogs. They, their staff, and the people they talk to read the Weekly Standard; they don't read the New Yorker. I think that both Cornyn and McConnell are practical politicians, not wild-eyed ideologues, but they're practical politicians living in a world in which people don't read the New York Times, certainly don't watch the network news, and don't seek out neutral sources of information. It's a world in which one hears over and over again that ACORN and the New Black Panther Party are major scandals, that unemployment benefits cause unemployment, and that the Obama administration made the budget deficit explode. The truth is, it's pretty hard if you live in that world -- or even if you just depend on those who live in it -- to keep this stuff straight.
Bill James used to say something about how he wasn't sure that the world was just, but that one thing he did find is that the universe swiftly punishes people who believe things that are not true. Given the way elections work, that's not always going to be the case; the chair of the NRSC can say all sorts of fool things on the Sunday shows, and it really has no practical effect. Nominating weak candidates does, however, matter, at least in the aggregate. Jonathan Chait is exactly right about this. If Republicans wind up leaving three to five Senate seats, and as many or more House seats, on the table because they're nominating bad candidates who they mistakenly think are exactly what the electorate is demanding, well, that's a pretty significant effect.