It is a word that is used, but means several different things.
For example, Sarah Palin is anti-establishment, but just received praise from economist, Larry Kudlow. On the other hand, Mitt Romney will be accused of being the establishment candidate (which supposedly is a bad thing) despite the fact that he is having a hard time winning over the establishment. I used to think establishment referred to the political junkies, such as congressional aides and campaign staffers, whose jobs depend on Republicans winning. But actually, I have come to the conclusion that much of the establishment consists of talk radio hosts and pundits, whose jobs depend on Republicans not winning. The establishment indeed is a mixed bag, but the part of the establishment that carries the most punch are the talk radio and TV pundits. In this sense, Sarah Palin is partly an establishment candidate.
The essential question is whether it is more important to win over the "organizational establishment," the community activists, like congressional aides and campaign staffers, who can be influential in local communities, or whether it is more important to win over the "media establishment," which controls the information intake of the base. Mitt Romney can win the former, but he is having difficulty winning over the latter.
Much of the media establishment's problem with Mitt Romney is that his presence reminds everyone of their past indiscretions on health care. How can Jim DeMint (who fits more into the media establishment) blast the individual mandate when he used to think it was a conservative idea? Mitt Romney represents a very awkward scenario for the media establishment. That is why when news clips come out of other Republican candidates' support (or, "openness") to the individual mandate, it causes much of the media establishment to put their head in the sand and ignore it. They simply can't afford another individual mandate-supporting candidate. It's too embarrassing.
The establishment used to be a respectable bunch. They were the guys who cared about winning. They were the policy experts who ignored the rantings of the circus known as the base. It used to be that while the base would demand that Obama show his birth certificate, the establishment would smile and support candidates who didn't make such demands. Now, the establishment is trying to be more responsive to the base. That means eliminating the guy they supported back in 2008 (I see you National Review).
The bottom line is that the lines between the establishment and the base are blurred these days. There is not a lot of leadership in the conservative movement. We need leaders who will lead, not pander. We need conservative pundits who will tell the truth, not pander. We need think tanks who will be more concerned with public policy than with playing nice with the base.
We need an establishment.
The original post referred to Larry Kudlow as a "pseudo-economist." I wrote that because of Kudlow's support of the return of the US to the gold standard, his anti-Fed rhetoric, and his support of a completely flat tax. I even wrote about Mitt Romney, when he went on Larry Kudlow's show a while back. That post is quite illuminating when considering Kudlow's recent comments about Mitt.
However, just because Larry will never occupy a chair in any major economic department around the world, does not mean that he is a "pseudo-economist." Kudlow's beliefs do not represent the majority view among economists, but I still shouldn't disregard what he says just because of his dissent within the field of economics.