We’re living in the age of bailouts, and Pakistani President Asif Ali Zardari knows it. During his recent meeting with the House Foreign Affairs Committee, Zardari likened his request for billions of dollars in military and other aid to the US government bailout of AIG.

The implication of this, of course, is that Pakistan is being severely mismanaged in much the same way as bailed out corporations. Many Pakistanis won’t dispute this. Two nights ago during a TV debate on the independent Pakistani cable news channel Aaj TV, there was near-unanimity among pundits (including former leaders of Zardari’s Pakistani People’s Party) that the government has stuffed the whole Taliban thing up. Yet still the Obama administration has no option but to deal with the elected government.

Pakistani villagers, however, do have other options, which the Taliban is taking full advantage of. The New York Times reported last month that the Taliban were:

Engineering a class revolt that exploits profound fissures between a small group of wealthy landlords and their landless tenants … [T]he militants organized peasants into armed gangs that became their shock troops. The approach allowed the Taliban to offer economic spoils to people frustrated with lax and corrupt government even as the militants imposed a strict form of Islam through terror and intimidation.

Asif Ali Zaradari is scion of Pakistan’s feudal political establishment, as are many in his PPP and in other more secular parties such as Opposition Leader Nawaz Sharif’s Pakistan Muslim League. The vast majority of Pakistanis live in villages and certainly are not wealthy land owners. The Taliban could repeat the same strategies in other Pakistani provinces, orchestrating what could become a peasant-based revolution.

However, victory for the Taliban isn’t just as easy as pitting peasants against feudal lords. What many Western observers forget is that the Taliban’s style of Islam is deeply unpopular in a region where the indigenous Muslim culture has had centuries of interaction with (and influence by) other faiths such as Hinduism and Sikhism.

The Taliban’s narrow sectarian agenda worries Shia Muslims, who make up around 20% of Pakistan’s population. The Taliban regard Shias as non-Muslims and have already shown disdain for at least one minority.

Still, the Taliban are only within 100 miles of the Pakistani capital. As Pakistani troops march in, an army of refugees from the Swat Valley are marching in the opposite direction, many headed for refugee camps once occupied by Afghan refugees fleeing Soviet invaders.