President Obama was never going to appoint Elizabeth Warren to head the Consumer Financial Protection Bureau that the Harvard professor conceptualized and created.

Wall Street speculators, big bankers and all the other insiders who make money by gaming the system—rather than innovating, creating or contributing anything of value to the economy or the nation—objected to being regulated by someone who would use not just the the rules but the bully pulpit to hold the robber barons to account.

So Obama went with a safer choice: former Ohio Attorney General Richard Cordray. The head of the CFPB’s enforcement division, Cordray was hired by Warren and is a capable and honest player—so honest that he is all but certain to face a confirmation fight of his own before he can take charge of the new agency, which will be up and running on July 21.

As Progressive Change Campaign Committee co-founder Stephanie Taylor, whose group led a campaign that collected 350,000 signatures backing Warren’s nomination said, “Rich Cordray has been a strong ally of Elizabeth Warren’s and we hope he will continue her legacy of holding Wall Street accountable.”

But Taylor summed up what will be the general response to Obama’s decision to bow to the demands of Wall Street, the big banks and their congressional handmaidens that someone other than Warren lead the CFPB.

“With her track record of standing up to Wall Street and fighting for consumers, Elizabeth Warren was the best qualified to lead this bureau that she conceived—and we imagine Richard Cordray would agree,” said Taylor.

President Obama came close to acknowledging as much in a statement anticipating Monday’s nomination of Cordray.

“I also want to thank Elizabeth Warren not only for her extraordinary work standing up the new agency over the past year, but also for her many years of impassioned leadership, and her fierce defense of a simple idea: ordinary people deserve to be treated fairly and honestly in their financial dealings,” said the president.

“This agency was Elizabeth’s idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country.”

But where will Warren continue to make that contribution?

She could continue to put the pieces of the CFPB together as the interim director—occupying the post until Cordray is confirmed. Warren could use her skills and make a significant contribution, but she would not have the bully pulpit or the full range of powers that are only available to the actual director.

The best place for Warren would be the US Senate, and it happens that a seat is available—representing the state where she has lived for much of her adult life: Massachusetts.

Republican Senator Scott Brown, a Wall Street favorite, will be seeking a full six-year term in 2012. Democrats have several credible contenders—and potential contenders—for the seat. Indeed, Congressman Mike Capuano has such an impressive record that progressive Democrats could have a tough time choosing between the congressman and Warren.

But if the point is policy, as opposed to politics, then getting Warren into the Senate—with the platform to lead the fight not just for consumer protection but economic fairness—ought to be a serious consideration.

I first met Warren more than a decade ago with our mutual friend Paul Wellstone, who was then a second-term senator from Minnesota. The senator used to joke that he could use ten more progressives in the Senate—“or one Elizabeth Warren.”

Wellstone’s point was clear enough. Warren has remarkable skills when it comes to communicating in an authoritative way about the need to crack down on reverse-mortgage hucksters and credit-card swindlers. She knows how to mix economic, political and moral arguments into statements that can define the debate.

Four years in the Senate could well make Elizabeth Warren a serious contender for the 2016 Democratic presidential nomination—and rightly so. As a senator, she would serve in the independent progressive Wellstone-Feingold style. And that’s almost certainly what Democrats—and Americans—will be looking for after the eight years of Obama or four years of Rombachperrycain.

But even if Warren never goes presidential, she (and those who have been enthusiastic about her potential as a national leader) should consider the Senate. Her election to the chamber would be in the tradition of former Alaska Senator Ernest Gruening, former Oregon Senator Wayne Morse and former New York Senator Daniel Patrick Moynihan, scholars and presidential appointees whose presence elevated the stature of the Senate and the general quality of the debate in Washington.

It would also be in the tradition of Wellstone, who recognized long ago that Elizabeth Warren would make a exceptional senator.