SARANAC LAKE—Doug Hoffman and his supporters gathered here to proclaim a great victory, the first peak in a populist right-wing movement that would sweep the ruling class out of office starting with a win in this Congressional district. Instead, they came up short, settling with a campaign that asserted conservative dominance over the moderate wing of the Republican Party, even if it couldn’t stand up to the Republican agenda.

“This is a race that…

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