Under what definition of news is the following not front-page news: the federal government cannot tell whether its spending $3 trillion well and effectively.

On Tuesday, the Senate finance committee held a hearing where three government watchdogs testified about the TARP program and other various corporate bailouts. Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, noted that the total amount of money being spent by the US government on TARP and other programs is $2.97676 trillion. (Yes, he was that specific.) And he noted that since government IGs typically worry that 10 percent of any given government program can be lost to fraud and waste, he's looking at potentially $300 billion worth of fraud.

That statement--a hypothetical warning--received media attention. But perhaps more alarming were the reports from the hearing that the feds are not doing all they can to monitor the bailout money they are throwing at various banks, insurance companies and other financial institutions. Barofsky said that in December he had proposed that "Treasury should require TARP recipients to monitor their use of funds and be required to provide certified reports to Treasury on how they are using taxpayer money." That sounds simple and logical, right? You get billions from the taxpayers, you state how you're using those billions. But that hasn't happened. Barofsky told the senators that this modest proposal has not been adopted.

More troubling was the testimony of Elizabeth Warren, who chairs the Congressional Oversight Panel that oversees TARP and the other bailouts. She offered several disclosures that ought to make a taxpayer flip his or her lid. Warren noted:

That's what Jim Pinkerton and I take on in our latest Bloggingheads.tv diavlog. Pinkerton thinks the stimulus and the Geithner bailout are going to lead the country to hell (even faster!). I contend that these are both good-faith efforts (though I'm less kind about the bailout), and we better damn well hope for the best. And we discuss the mess in Afghanistan. We also debate the Reagan years. Anyone remember those dead nuns in El Salvador?

There's a lot going on these days: a presidential transition, numerous confirmation hearings, various appointment announcements, and assorted megabucks bailouts--not to mention a couple of wars. But my favorite item of the day came from the publicity office of the American Enterprise Institute. AEI sent out an email announcing an event next week:

Is Deregulation a Cause of the Financial Crisis?

During the recent campaign season, the Democrats blamed the financial crisis on "Republican deregulation," in particular the Gramm-Leach-Bliley Act of 1999 (GLBA) and the Commodity Futures Modernization Act of 2000 (CFMA). The GLBA repealed the provisions of the Glass-Steagall Act of 1933 that prevented affiliations between commercial and investment banks, and the CFMA, among other things, exempted credit default swaps and other derivatives from regulation by the Commodity Futures Trading Commission. Although both acts were backed by the Clinton administration, Senator Phil Gramm (R-Texas)--then the chairman of the Senate Banking Committee--was the key congressional sponsor of the legislation. Is it plausible to connect the GLBA and the CFMA with the current financial crisis?

And guess who is going to address this question? Yep, Phil Gramm.

I think I can safely say that a piece I wrote last year put into political play the notion that Gramm, who had been an adviser to McCain, helped grease the way to the subprime meltdown by using a backroom maneuver in late 2000 to pass the Commodity Futures Modernization Act, which deregulated swaps, a complex financial instrument used to support various sorts of financial deals. And there's not much question that the rapid growth of the nontransparent swap market contributed to the subprime debacle.

These days, Gramm is a well-paid executive at Swiss banking giant UBS, which has blamed its own financial troubles on swaps.

When I was working on that article last spring, I contacted Gramm. But he declined to talk--and he went on to become something of a lightning rod for McCain in the summer when he dismissed Americans' concerned with the economy as "whiners." Now that the campaign dust has settled, he's ready to discuss all this. I'll make a bold prediction and say that his presentation is going to go something like this: it wasn't me.

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In the past few weeks, I've been repeatedly asked by friends and acquaintances, "Well, what do you think of Obama's first appointments?" These various inquisitions gave me a chance to organize conflicting thoughts--which was fortunate, for The Washington Post's "Outlook" section asked me to contribute a piece on this question. The article will appear on the front page of the section on Sunday. But it's already been posted--old media meets new media--and here are some excerpts:

The more things change, the more they stay . . . well, you know. And looking at President-elect Barack Obama's top appointments, it's easy to wonder whether convention has triumphed over change -- and centrists over progressives.

A quick run-down: Sen. Hillary Rodham Clinton, who supported the Iraq war until she initiated her presidential bid, has been handed the Cabinet's big plum: secretary of state. And Bush's second defense secretary, Robert Gates, will become Obama's first defense secretary. The Obama foreign policy adviser regarded as the most liberal in his inner circle, Susan E. Rice, has been picked for the U.N. ambassador slot. Obama is elevating this job to Cabinet rank, but he's still sending Rice to New York -- and in politics and policy, proximity to power matters. For national security adviser, Obama has picked James L. Jones. The retired four-star general was not hawkish on the Iraq war and seems to be a non-ideologue who possesses the right experience for the job. But he probably would have ended up in a McCain administration, and his selection has not heartened progressives.

Obama's economic team isn't particularly liberal, either. Lawrence H. Summers, who as President Bill Clinton's Treasury secretary opposed regulating the new-fangled financial instruments that greased the way to the subprime meltdown, will chair Obama's National Economic Council. To head Treasury, Obama has tapped Timothy F. Geithner, the president of the New York Federal Reserve, who helped oversee the financial system as it collapsed. Each is close to Robert Rubin, another former Clinton Treasury secretary, a director of bailed-out Citigroup and a poster boy for both the corporate wing of the Democratic Party and discredited Big Finance. Obama's Economic Recovery Advisory Board will be guided by Paul Volcker, the former Fed chairman whose controversial tight-money policies ended the stagflation crisis of the 1970s but led to a nasty recession. (A genuinely progressive economist, Jared Bernstein, will receive a less prominent White House job: chief economic adviser to Vice President Joe Biden.)

It's no surprise that many progressives are -- depending on whom you ask -- disappointed, irritated or fit to be tied. Sure, Obama's appointments do represent change -- that is, change from the widely unpopular Bush-Cheney status quo. But do these appointments amount to the kind of change that progressives, who were an essential part of Obama's political base during the campaign, can really believe in?

Perhaps Obama is trying to pull off something subtle -- a sort of stealth liberalism draped in bipartisan centrism. But it's understandable that progressives are worried....

So with these hawkish, Rubin-esque, middle-of-the-road picks, has Obama abandoned the folks who brought him to the dance?

My hunch is that Obama has made a calculation. In constructing his administration, he has decided not to create a (liberal) Washington counter-establishment. Instead, he's fashioning a bipartisan, centrist-loaded version of the Washington establishment to carry out his policies, which do tilt to the left. (And good news for the establishmentarians: Having screwed up on Iraq or the economy is no disqualification.) When asked at a Nov. 26 news conference whether his appointments of old Washington hands indicated that his administration was not going to be a festival of change, Obama replied, "What we are going to do is combine experience with fresh thinking. But understand where the -- the vision for change comes from first and foremost. It comes from me." His job, he added, was to "make sure . . . that my team is implementing" his policies. In other words, la change, c'est moi.....

For the moment, the watchword for progressives ought to be a version of an old Reagan trope: hope, but verify....

You can read the conclusion and the entire piece here.

I'm on the run today and will be on holiday for the rest of the week. Thus, postings will suffer. But this morning The Washington Post, reporting on the federal rescue of Citigroup, notes:

The government is not firing Citi's executives, but it is requiring that their compensation be approved by federal authorities under terms that are not yet finalized. And it is requiring that the bank help people at risk of losing their homes avoid foreclosure by using the same aggressive approach that the Federal Deposit Insurance Corp. has required of IndyMac, a California-based bank it took over in July.

Is it too much to expect that some of the folks responsible for the mess lose their jobs? As I watch friends, relatives, and strangers get slammed by the economic downturn, I am angered by the notion that many of the people who steered us into this disaster--yes, the Robert Rubins of the world--were able to make millions of dollars a year screwing up and now do not face the same consequences as those thousands of Americans who are being laid off or those who have lost their retirement security.

Let's have some heads roll. On the campaign trail, John McCain was right to show some anger about all this--but it was never clear if he really meant it. Meanwhile, there aren't too many corporate honchos being given the boot or having their mansions repossessed, while the Rubin gang rides back into town to save the system. (I revisited Larry Summers' culpability yesterday.) Is it too Grinch-ish to want to see the geniuses that failed suffer?