The electrodynamics of clouds of enhanced plasma density in the postsunset midlatitude E region ionosphere are simulated in three dimensions. Such clouds become polarized in the presence of a background electric field, as would be imposed by the F region dynamo. If the clouds are elongated so that their major and minor axes in the horizontal plane are much larger and smaller than about 1 km, respectively, the polarization electric field can become an order of magnitude larger than the applied field. Elongated depressions or ripples in planar layers also become polarized but to a lesser degree. Electric fields and Hall drifts sufficiently large to excite Farley Buneman instabilities can be produced, particularly when neutral wind forcing is considered in addition to background electric fields. The plasma clouds are also unstable to a collisional drift instability capable of generating large-scale primary waves. A linear, local dispersion relation for this instability is derived. The primary waves are presumed to be capable of generating small-scale irregularities through mode coupling and plasma turbulence. Polarized plasma clouds drifting through the radar-scattering volume may account for many of the characteristics of type I and type II quasiperiodic echoes.