Dan Gerstein, writing on Forbes.com, had it exactly right today: the "real story within the stimulus bill drama is the power jockeying going on within the Democratic family." Put it another way, the unfolding relationship between the Obama White House and the Speaker of the House, Nancy Pelosi, provides the key to understanding the course and character of the next eight years. Ironically, as Gerstein points out, this conflict is also the most neglected story in the Federal City right now.

First, how important is the stimulus package itself? Not very. Spending a trillion dollars we don't have is mostly a bad idea, but, nevertheless, one whose time has come. Whether we borrow another trill to sod the National Mall, make Planned Parenthood facilities more available to poor people in need of dignified abortions, or build bridges and roads, none of the details are very important.

We know it will pass. We can also safely assume that it will NOT have a salutary effect on the economy. But we can also predict that the economy will turn upward in the near term unrelated to the massive injection of federal money, the media will happily label the uptick the most astounding economic recovery of the modern age, credit the Obama administration for true genius, and laud the stimulus package as the vessel of our salvation.

2012: Happy Days will be here again. No matter what passes (and, once again, we all know something will pass), President Obama wins in the short term. America likes him. The media adores him. And we all want him to succeed.

But there is one trap he must avoid.

Barack Obama understands his political fortunes are directly related to how far he can distance himself from Nancy Pelosi and her extreme left-wing ideology.

Why?

San Francisco liberalism does not work--nor does it play well among regular Americans. Four years of Nancy Pelosi appearing weekly on Meet the Press setting his agenda is not a recipe for a successful Obama presidency. He cannot succeed politically or substantively, if Henry Waxman, Barney Frank, John Conyers, and Speaker Pelosi set the tone for his administration. She is arrogant, vindictive, and over confident. Her leadership means a punishing tenure for the minority in the House and a continuance of Bush Derangement Syndrome, featuring show trials and unhinged attacks on a villain in absentia. This will fly in the face of the post-partisan image Obama has so expertly crafted. In fact, such a circus might even be enough to blunt the unrelenting tide of disapproval for the beleaguered Forty-Three.

The President is an astute politician. He understands Pelosi is poison. He understands the public crucifixion of his predecessor (and/or our intelligence community) is a sideshow he does not need and cannot afford. Obama cannot allow the Old Radical Left in the House to run amok.

Can this President overcome his own party leadership?

I am encouraged by Obama’s choice of Rahm Emanuel as chief of staff, as Emanuel seems to be the only Democrat in Washington who can stand up to the Speaker. How will they deal with her? A public humiliation of the Speaker at the hands of the Team Obama is highly unlikely; it is not their style--and it causes another set of problems. Nevertheless, there is a significant wrestling match going on right now between Pelosi and the White House, which Obama must win to be successful. He is fully aware of this, and I expect him to prevail.

The stimulus is an important test of this theory. As I say, a trillion dollar stimulus in any incarnation is an ill-conceived notion--but it is going to happen. The test is how much of the old Liberal rubbish Obama is willing to force us to choke down. How much of the most politically embarrassing elements of the package can the Obama forces trim away in the murky cloakrooms of the United States Senate? How well can he co-opt Republicans in order to insulate himself against future attacks.

None of this will be easy. Obama is now forced to make a transition from back-bencher with no real responsibility to the owner of the desk where the buck stops. He no longer has the luxury of blending in with the crowd. Now that he is irrevocably in the spotlight, he really does need to stand up as a "New Democrat" and make a break with the Left Coasters.

Let's see what happens.