01/04/2012 04:46 pm ET Updated Mar 05, 2012

A Good Morning for the President

The conventional wisdom line is set: with his victory(?) in Iowa, Mitt Romney is sure to win the Republican nomination, and he is the strongest candidate against Obama, so yesterday settled things in a good way for the Republicans. But I'm feeling like this was a very good morning for the President: Romney is still the likely winner of the nomination, but his fight against Rick Santorum will be tougher than anyone is currently predicting and will open up deep divisions in the Republican party; and Romney is the perfect opponent for a President now emulating anti-Wall Street trustbuster Teddy Roosevelt. The fact that Obama chose the morning of Romney's win in Iowa to announce the recess appointment of populist Richard Cordray as the new head of the Consumer Financial Protection Bureau is a beautiful moment: the stage is now perfectly set for a classic election fight between Wall Street's candidate and Obama.

More on the Cordray appointment in a moment, because it really is important. But first, my take on the results from my beloved former home state of Iowa. In my predictions about what would happen, I was wrong about one big thing and right about one thing. I had forgotten until a few days ago that the Republican caucus system is less like a caucus the way Democrats set it up, where people have a second ballot to go to a new person if their candidate wasn't viable (viability being set at 15 percent), and more like a straight up secret ballot, where people just get one time to vote. Because of that mistake, I had been thinking Romney would do a lot worse than he did, because he is no one's second choice. In this year's GOP, either you are a business-oriented Republican who likes Romney's CEO background and thinks he is the most electable candidate, or you just don't like him and are desperately searching for another candidate to go against him. If that system had been in place, Romney would have been killed by Santorum last night, because in all the precincts where Bachmann, Perry, and Gingrich weren't viable, Santorum would have been the overwhelming beneficiary of the second-place votes. Instead, it was a straight-up vote, and Romney won by the narrowest of margins because of the conservatives splitting their votes.

However, I did get the Santorum thing right. About 10 weeks back, when Cain was riding high, I started telling friends that there was no way he could last long at the top of the Republican polls. I thought Gingrich would have a turn, but was pretty sure that a few weeks in the sun as frontrunner would remind people why they didn't like him. I thought one of the conservatives at the bottom of the polls -- Bachman, Perry, or Santorum -- would start to surge. Given that Perry and Bachmann had already had their moment in the spotlight and hadn't impressed, my strong hunch was that it would Santorum. In the last few weeks, it became more and more likely in my view that this would happen, as some Iowa right-wing movers and shakers I knew from my days there like Bob Vander Plaats and Chuck Hurley came on board for Santorum. To people who thought I was crazy for predicting that someone at the bottom of the Iowa polls would be the winner, I reminded them of the Iowa caucus surges of the past, like when John Kerry at 10 percent and John Edwards at 5 percent two weeks out ended the 2004 caucuses at 38 percent and 32 percent respectively.

Santorum has no money, and he has no organization in any state other than Iowa and his home state of Pennsylvania, but I think he will give a tougher run at Romney than conventional wisdom suggests. We know three things about the 2012 Republican primary electorate: (a) 15-20 percent of them are intrigued enough by the anti-establishment, anti-orthodoxy Ron Paul candidacy to support him; (b) 25 percent are establishment-oriented enough to vote for Romney; (c) everyone else in that electorate is desperate enough for another candidate to have considered Bachmann, Perry, Cain, Gingrich, and now Santorum in one 5-month period. Santorum will be savaged by attacks he doesn't have the money to answer, and will be completely out-gunned organizationally, but the anti-Romney feeling is very strong and very deep in the Republican primary electorate, so this race could be tougher than people think. Here's the other thing: if one of these big right-wing groups decides to use their clout and money to defend Santorum from Romney's super-PAC attacks, this could be a very drawn-out fight. Romney is very likely to still win, but it will be tough.

So how does Richard Cordray play into Presidential politics? If Romney is the Republican candidate, in spite of what I wrote above about the toughness of his remaining primary battle, running against Wall Street is the way to win this race. Two Democratic presidents in the last century-plus have won re-election in tough economic times, FDR in 1936 and Truman in 1948, and they both won the same way: a populist campaign taking on Wall Street and big corporate money. With the horrors of the financial meltdown fresh in voters' minds, this is the year to win the same way. And in Mitt Romney, you have Mr. 1%, Mr. Wall Street, as Obama's opposition. Cordray is a protégé of Elizabeth Warren, and was the best attorney general in the country from 2007 to 2011 in taking on the abuses of Wall Street. And picking a fight with the Republicans on the morning Mr. Wall Street probably assures himself of the GOP nomination couldn't be a better symbol of that kind of populist campaign.

It has been a fun ride so far, the most entertaining presidential primary fight ever in my opinion. Now the fun gets even better, as Romney has to fight a rear guard action trying to get the right wing to finally give in and accept him, and as the Obama team gets their populist credentials in order so they can focus on attacking Mr. 1%. I am liking this fight.