Elizabeth Warren at NN10 (photo courtesy Marta Evry)

Now that the Consumer Financial Protection Bureau has been created, everyone is waiting for Obama to nominate someone to head it. On the surface, this would appear to be a no-brainer: Elizabeth Warren, the person who came up with the idea and the current head of the Congressional Oversight Panel that oversees TARP. But it’s been a month since Obama signed the legislation to create the CFPB, and there’s been no nomination.

If Obama really wanted Warren, he would have tapped her as soon as the ink was dry on the bill. So what’s behind the hesitancy? Tim Geithner has been one big obstacle to Warren’s nomination. As Shahien Nasiripour put it,

It’s no secret the watchdog and the Treasury Secretary have had a tenuous relationship. Geithner’s critics have enjoyed watching Warren question him during his four appearances before her panel. Her tough, probing questions on the Wall Street bailout and his role in it — often delivered with a smile — are featured on YouTube. One video is headlined “Elizabeth Warren Makes Timmy Geithner Squirm.”

And if Geithner is squirming, you can be sure that the Banksters are squirming, too. They have no doubt been making their uncomfortableness known to the folks at Treasury and the Fed, and to the White House as well. Their favorite outlet, the Wall Street Journal, pushed Michael Barr as an alternative, just to help the WH look past Warren.

But the longer this soap opera drags on, the more of a box the WH finds itself in. Brady Dennis laid out part of the dilemma in yesterday’s Washington Post:

If Obama doesn’t choose her, he risks infuriating his already-agitated liberal supporters who see Warren as the only logical candidate.

If he gives her the nod, Obama risks deepening the financial community’s distrust of his administration and sparking a confirmation fight. He would be elevating a woman who, despite her mild manner, has repeatedly proven herself a thorn in the administration’s side during her tenure as watchdog over the government’s $700 billion bank bailout program.

Call those options A and B.

If they go with A, the howling will be incredible, and not just from the Professional Left. “She’s good enough to come up with the idea for the agency, but not good enough to head it? She’s good enough to head up the Congressional TARP review committee, but not this new agency?” Speculation is already being aired about this prospect, like today’s story at Politico, which probes the potential sexism issue.

If they go with B, the WH gets a consumer advocate who is going to be about as independent as possible, which is *well* outside their comfort zone. As Jane noted the other day, Team Obama does not like the prospect of having someone who was right about the coming financial mess in the midst of a team of folks who were wrong (and who, like Geithner and Bernanke, were at the middle of the house of cards when it was all being constructed).

But choosing Warren is only part of the political game — after all, Obama chose Dawn Johnsen, Goodwin Liu, and Edward Chen, too . . . and look what happened to them. As Marcy noted, let’s not mistake a nomination for an appointment.

Which brings us to Option C. If Obama nominates her and lets her dangle, a la Dawn Johnsen, what is the likelihood that Warren will be a good soldier and say nothing as the clock ticks away? She’s already shown by her TARP oversight work (especially her questioning of Geithner) that she isn’t particularly over-awed by people with big titles and fancy offices, and is more than willing to call people out for being wrong. Alternatively, what is the likelihood that she’ll get rather upset at being dangled out there to appease the Professional Left without having her nomination actively pushed by the WH, and make her displeasure known in a very public way?

If you’re Rahm Emanuel, option C is seductive . . . but if you guess wrong on how she’d react to being nominated and left to dangle, you’re going to pay a very, very steep price.

The longer this drags on, the harder it will be for the White House to say “we’re trying to look at all the best candidates.” It’s not like this is a Supreme Court nomination, that came up unexpectedly when someone died to creat a vacancy. Ever since the battle to create the CFPB was begun, the WH has been thinking about who to put at the head of it. Meanwhile, as Obama dithers, congressional support for Warren is growing by the day (see Teddy’s great diary about Jeff Merkley, or David Dayen’s coverage here and here). More and more this is becoming a less a question of “who?” and more a question of “Why not Warren?”

And that’s a question that the Obama White House does NOT want to answer.