With Palin in the race, there would be three “big” figures — Palin, Perry and Bachmann— all competing for tea party voters. Assuming none of the three run away with the support of a large number of tea partiers — and Perry clearly has the best chance to do that — the resulting fracturing of the vote would allow Romney a path to victory.

(An interesting related thought: If Palin does run, Romney would need to seriously re-consider his plan to downplay the Iowa caucuses, since Bachmann’s strength there coupled with Perry and Palin going all-out would make a victory in the Hawkeye State a real possibility for him.)

The other way that a Palin candidacy would help Romney is to allow him convince more establishment types that he is the only candidate in the field who can maximize the party’s opportunity against President Obama in 2012.

The fear of Palin as the party’s nominee remains palpable for many members of the Republican establishment.