This week on The Bottom Line podcast:

President Obama arrives for a news conference at the G-20 summit in London on Thursday. (AP)

New revelations in the Bernard Madoff case. Exhibit A? The transcript of a conversation that “never happened” between Madoff and a Connecticut hedge fund funneling billions his way. What was in a letter the company sent to “Dear Bernie” just hours before he turned himself in? Did it accuse him of running what may very well be the most massive Ponzi scheme in history? Hardly.

And troubled waters for the newspaper industry, as it struggles to stay afloat in a sea of online news. So what will the future of news look like? The truth is, nobody knows. But in the meantime, there are a lot interesting experiments going on to find out.

Plus, President Obama makes his first trip to Europe as president for the G-20 summit in London. How’d he do? How’d it go? All this and much more on this week’s Bottom Line podcast.

President Obama greets South Korea President Lee Myung-bak Thursday at the G-20 summit in London. (AP)

Leaders of world economic powers agreed Thursday to a mix of financial assistance and regulation designed to fight off the worst recession since the 1930s, as a one-day summit in London came to a close.

British Prime Minister Gordon Brown said the G-20 leaders would pump more than $1.1 trillion into the world economy through the International Monetary Fund and other organizations and impose stricter regulations on financial institutions that include oversight of executive pay, tax havens and hedge funds.

“We are rebuilding the international financial system so that it serves the people, rather than, as on occasion, it has served itself,” Brown said at the close of the daylong summit.

He said the plan includes tripling the resources available to the IMF to $750 billion, supporting $250 billion in IMF reserves called Special Drawing Rights and ensuring $250 billion to support trade.

Brown, the summit host, said the European Union and Japan have each agreed to contribute $100 billion to boost IMF resources, and the U.S. suggested it might contribute a similar amount. China will contribute $40 billion and gain more power at the IMF, he said.

The G-20 leaders –- who include the leaders of 19 industrial and developing countries and the European Union –- also asked the IMF to open sales of its gold reserves to raise money to help poor countries.

Attending his first international summit, President Obama lauded the actions taken by G-20 leaders, saying he believes the group made strides toward turning around the global economy.

“I’m excited about the ability not just to help heal this economy but also to make progress on a sustainable model of economic growth that relies less on a cycle of bubble and bust — something that I’ve spoken about back home,” Obama told a news conference.

He acknowledged that other world leaders “indicated from their perspective that this [financial problem] started in America, or this started on Wall Street, or this started with particular banks or companies.

“You know, perhaps what helped was my willingness to acknowledge — and it’s hard to deny — that some of this contagion did start on Wall Street,” he said. But he also noted, “I think that part of the reason people didn’t give me too hard a time is because if you look at European banks or Asian banks, they’ve had their own issues.”

In addition to the financial pledges by the G-20, Obama said he plans to ask Congress to provide $448 million in assistance to vulnerable populations from Africa to Latin America and double the amount of money the U.S. provides for food safety to more than $1 billion.

Although G-20 leaders skirted the issue of pumping additional stimulus money into their home economies, Brown said the actions that have been taken thus far will put an additional $5 trillion into the economy by the end of next year.

“Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale,” Brown said.

Those actions will restore credit, stimulate growth and save or create millions of jobs in the global economy, he said.

The G-20’s closing statement also said that world leaders agreed to the creation of a new supervisory body to oversee the global financial system. That includes reining in excessive pay for executives, regulating hedge funds and publishing a blacklist of tax havens.

Acknowledging that problems in the U.S. financial industry were a factor in the current economic meltdown, Obama said he supported the move for greater oversight.

“We thought it was important to make sure that we had a strong, coordinated regulatory response, and many of the details of the regulatory response draw from principles that we had developed prior to coming here,” Obama said.

This week on The Bottom Line podcast: As the economic stimulus package meanders through Congress, President Obama warns us the crisis could become irreversible if lawmakers don’t act now.

…Really? Co-hosts Curt Nickisch and Andrew Phelps pick apart this week’s Bottom Line Buzzword, uttered by POTUS himself: Catastrophe.

Car Talk's Ray Magliozzi, left, and his brother, Tom, in 2008. (AP)

Plus, we nominate Car Talk’s Ray Magliozzi for car czar. He’s happy with his day job at the Good News Garage, thank you very much, but he returns to the show with some advice for the next car czar: “I don’t think any stimulus or any overnight answer is going to suffice here. I think they’re going to have to start innovating.” Ray suggests the government partner with the Big 3 to build a nationwide high-speed rail network. And he renews his call for a 50-cent national gas tax.

Also on the show: If your colleagues lose their jobs but you get to keep yours, how do you feel? A workplace psychologist says a lot of people suffer survivor’s guilt at the office.

And we check in again on Dancing Deer Baking Company, a Boston cookie shop that just laid of 10 people after years of growth. There is definitely some survivor’s guilt going on there. (You can catch the whole series over here.)

Get the week’s economy news — with a Boston accent — on The Bottom Line from WBUR.

The Treasury Department’s plan would draw on the second installment of the $700 billion financial rescue package known as the Troubled Asset Relief Program (TARP), which was passed by Congress in the waning days of the Bush administration.

Geithner was set to present the plan at 11 a.m. ET Tuesday. The government hopes the plan will provide adequate incentives to private investors to buy up to $500 billion in bad assets.

Treasury also is expected to announce it will target $50 billion aimed at stanching a flood of home foreclosures.

President Barack Obama gestures as he speaks at his first news conference, Monday, Feb. 9, 2009, in the East Room of the White House in Washington. (AP Photo/Ron Edmonds)

Obama Warns of Economic Catastrophe If Lawmakers Don’t Act On Stimulus » President Obama turned his prime-time news conference Monday night into a defense of his emergency stimulus plan and an offensive against Republicans who try to “play the usual political games.”

Clearing the way for a Tuesday vote when formal passage is expected, the Senate advanced an $838 billion version of the stimulus plan Monday. (NPR)

Sen. Edward Kennedy returned to the Senate to cast a vote for the plan, saying the test vote was too important to miss. (WBUR)

Florida is looking for their share of the plan. Republican Gov. Charlie Crist is supporting the proposal that much of the GOP opposes. (NPR)

On Point takes a look at and pulls apart President Obama’s recipe for recovery.

Part of the bill increases food stamp benefits because of the steep rise in applications. (NPR)

The plan also includes roughly $70 billion for the nation’s energy economy, most of it for “green” energy. (NPR)

Gov. Patrick Weighs 27-Cent Gas Tax Hike In Massachusetts » Gov. Deval Patrick is considering raising the state’s gasoline tax by 27 cents per gallon as part of a comprehensive transportation overhaul plan. The proposal would stave off a doubling of Turnpike tolls planned for this summer, but leave the state with the highest gasoline tax in the nation, at 50.5 cents. (WBUR)

Boston Mayor Thomas Menino is looking for ways to ease the city’s budget woes. The mayor and his senior aides are taking a 3-percent pay cut and freezing their wages. (WBUR)

Facing cuts in state funding, the University of Massachusetts system plans to raise fees by $1,500 a year, hoping to raise $68 million. (WBUR)

A couple look at cars at an autor sales yard in Beijing Thursday, Jan. 15, 2009. China has approved a new set of tax cuts and subsidies aimed at boosting flagging demand for cars, while pledging more help for its ailing steel sector. (AP Photo/Greg Baker)

China Auto Sales Overtake U.S. In January » The Chinese bought more cars than Americans did in January, according to China’s figures. If the numbers stay on trend, this could be the year that China surpasses the United States as the world’s number one automobile market. (NPR)

Meanwhile, owning a car is changing Chinese society — from courtship rituals to leisure activities. (NPR)

Swiss Bank UBS Loses $7.57B, Cuts 2,000 Jobs » Swiss bank UBS reported Tuesday it lost a larger-than-expected $7.57 billion in the fourth quarter and announced it would cut another 2,000 jobs as it refocuses on its home market. (NPR)

President Obama used his first White House news conference Monday night to personalize the dire state of the nation’s economy, leveraging his popularity and the power of his office to urge Congress and the country to get behind his stimulus package. (news conference transcript)

President Obama walks down the Cross Hall to hold his first news conference, Monday, Feb. 9, 2009, in the East Room of the White House in Washington. (AP Photo/Ron Edmonds)

Despite his effort to get bipartisan support for his huge economic plan, the rewards have been meager: zero Republican votes in the House and three in the Senate. But Obama pledged to continue to try to “build up some trust over time.”

“We find ourselves in a rare moment where the citizens of our country and all countries are watching and waiting for us to lead,” Obama said during his prime-time appearance. “It is a responsibility that this generation did not ask for, but one that we must accept for the sake of our future and our children’s.”

In his hourlong televised appearance, the president touched on a range of issues, from the war in Afghanistan to steroid use in Major League Baseball. But the bulk of his time was spent laying out the nation’s economic challenges and his legislative prescription.

Fresh from a town-hall style meeting earlier Monday in Elkhart, Ind., Obama frequently highlighted the economic devastation in that community to illustrate how working-class America has been affected by the crisis. Elkhart’s unemployment rate has gone from 4.7 percent to 15.3 percent in a year, and the town has lost jobs faster than “anywhere else in America,” he said.

“Local TV stations have started running public service announcements that tell people where to find food banks, even as the food banks don’t have enough to meet the demand,” Obama said. “As we speak, similar scenes are playing out in cities and towns across the country.” He pointed to the fact that 598,000 jobs were lost nationally last month, and spoke of the 1,000 men and women who stood in line for a chance at 35 firefighter jobs in Miami.

When asked whether his language about the economy has been too dire, Obama responded: “What I’m trying to underscore is what the people in Elkhart already understand — this is not your ordinary, run-of-the mill recession.”

In discourses that ate up much of the hourlong give-and-take with the media, the president stoutly defended his plan, saying the price tag of more than $800 billion wasn’t “plucked out of a hat.”

Obama said there are three benchmarks by which the American public can assess whether the stimulus package is working.

“My initial measure of success will be creating or saving 4 million jobs,” he said, followed by a stabilization of the credit market and then the housing market. “If we get things right, then starting next year, we can start seeing some significant improvement.”

Addressing Republican Critics

During his appearance, Obama sought to project an image of a president determined to address the economic crisis, and to silence Republican critics who have made the political calculation that opposing his stimulus plan en masse will ultimately be a winning position.

The president addressed those critics directly: “If there’s anyone out there who still doesn’t believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans out there now who don’t know where their next paycheck is coming from.”

The government, Obama said, is the only entity able to stem job losses and create some stability in the flailing economy. And the plan Congress is preparing to deliver is “big enough and bold enough to meet the size of the economic challenge we face right now,” he added.

With the Senate poised to pass its version of the stimulus package Tuesday after a crucial test vote Monday afternoon, both parties joined the president in lobbying the public with renewed zeal.

Senate Minority Leader Mitch McConnell of Kentucky accused Obama and congressional Democrats of deceiving the public by rolling out separate high-dollar spending plans for the stimulus and the bank and housing bailouts. Meanwhile, House Speaker Nancy Pelosi of California issued a press release highlighting Republican House leaders’ “no” votes on initiatives ranging from expanding children’s health care, to reforming the bailout programs.

“There is no time to delay,” Pelosi said, echoing the president.

To underscore the importance the administration has placed on bolstering public support for the nearly trillion dollar spending-and-tax-cut stimulus plan, the president plans to continue to hold campaign-like stops in areas hardest hit by the historic downturn.

On Tuesday, the president is scheduled to travel to Fort Myers, Fla., which has been hammered by the housing crisis. The state’s Republican governor, Charlie Crist, has said he will introduce the president in a show of bipartisanship that has largely failed to materialize in Washington.

Leaders from the two chambers are expected to begin meeting to meld the two bills immediately after the Senate vote on Tuesday. Both the Senate and the House will have to approve the compromise measure before it hits the president’s desk.

Also Tuesday, the administration is expected to reveal a spending plan for the ongoing bailout of the nation’s banks. Treasury Secretary Timothy Geithner is expected to detail how the second half of the controversial TARP money — some $350 billion — will be distributed.

The administration on Monday touted a new Gallup Poll that found that 76 percent of those surveyed approved of how the president is handling his job. Sixty percent approved of how Democrats on Capitol Hill are performing, compared with a 44 percent approval rating for Republicans.

But just 54 percent say they support the economic stimulus, according to the poll, and the 45 percent who oppose it were the likely target of Obama’s message.

As Monday’s press conference drew to a close, Obama was again asked about the partisanship that has marked debate on the stimulus and how he could expect that could ever change.

“I am the eternal optimist,” the president said, echoing his earlier comments about not giving up on changing the tone in the nation’s capital.

It’s something that, he suggested, the American public just might appreciate at this moment in history.

Economists expect consumer spending, which accounts for the largest portion of total economic activity, to remain weak this year, prolonging an already painful recession.

The Commerce Department reported Monday that personal consumption spending dropped by 1 percent in December. That was slightly worse than the 0.9 percent decline economists expected.

Incomes, reflecting a wave of layoffs, fell for a third straight month, but the 0.2 percent drop was slightly better than expected.

Still, Americans worried about the possibility of more job cuts boosted their savings rate to 3.6 percent of their after-tax incomes in December. That was the highest level since tax rebate checks temporarily pushed the rate up to 4.8 percent in May.

For the year, consumer spending rose by just 3.6 percent, the smallest annual increase since 1961. Incomes rose by 3.7 percent, the weakest gain since a 3.2 percent advance in 2003.

The Federal Reserve will provide a reading of just how bad the credit crunch is later Monday with the release of its latest survey showing how many banks are tightening their lending standards for consumers and businesses.

Two other reports released Monday showed recessionary conditions persist in the construction and manufacturing sectors.

Construction spending fell by 1.4 percent in December, reflecting weakness in both residential and nonresidential building, according to the Commerce Department. For the year, construction activity was down a record 5.1 percent as home building plunged by 27.2 percent, the biggest annual decline on records that go back to 1993.

President Obama is pushing Congress to pass an $819 billion economic stimulus package that would include increases for government infrastructure projects such as highways and bridges.

Meanwhile, a key gauge of manufacturing activity edged up slightly in January but still showed contraction for the 12th straight month. The Institute for Supply Management said its manufacturing index rose to 35.6 in January from an all-time low of 32.9 in December. Any reading below 50 indicates contraction in the sector.

He met with GOP lawmakers on Capitol Hill on Tuesday shortly after House GOP leaders tried to rally opposition to the stimulus measure backed by the White House.

After meeting with Republicans, and before heading to the Senate to meet with Republicans there, Obama said he’s still optimistic about the ability to get the package done. He says he knows there won’t be “100 percent support,” but that he’s going to “continue to welcome good ideas” from Republicans.

House Minority Leader John Boehner says Republicans look forward to continuing to work with Obama to improve the package. He and other Republican leaders say they believe Obama is ready to hear their ideas.

House GOP Whip Eric Cantor says the bill contains a lot of spending that “has no place” in a stimulus measure that should be focused on job creation.

Geithner was quickly sworn in to office Monday night, becoming the nation’s 75th treasury secretary and one of the point men President Barack Obama will be counting on to help pull the country out of its economic slide.

Obama attended the ceremony at the Treasury Department.

The Senate confirmed Geithner’s nomination on a 60-34 vote.

As president of the New York Federal Reserve Bank, Geithner has been a key player in the government’s response to collapsing financial institutions and the troubled housing and credit markets.

Geithner’s nomination was held up after it was revealed that he had failed to pay more than $34,000 in taxes.

Is this the face of the global banking sector? (AP Photo)

This week on The Bottom Line podcast: Is the government throwing away cash to prop up “zombie banks?” We talk with New York Times columnist Gretchen Morgenson about how President Obama might revive them. Plus, host Curt Nickisch examines a staggering one-point increase in the Massachusetts unemployment rate. And WBUR’s David Boeri visits with shoppers on a Circuit City liquidation binge on Inauguration Day.

Geithner told the Senate Finance Committee he was sorry that his past transgressions were now an issue in his confirmation at a time of deepening economic distress. He urged Congress to act quickly and forcibly to deal with the crisis. A top administration priority is to foster economic recovery and “get credit flowing again,” Geithner testified.

As to his failure to pay payroll taxes from 2001 to 2004 while he worked for the International Monetary Fund, Geithner said: “These were careless mistakes. They were avoidable mistakes.”

“But they were unintentional,” he said.

Geithner told the panel that, for the 2001 and 2002 tax years, he had prepared his tax returns himself with a popular tax-preparation computer program.

He said that he hired an accountant to do his 2003 and 2004 taxes who also “did not catch my error.”

He acknowledged signing an IMF statement saying he was aware that it was his responsibility to fully pay U.S. Social Security and Medicare taxes.

“I absolutely should have read it more carefully,” he said. “I signed it in the mistaken belief I was complying with my obligations.”

Sen. Charles Grassley of Iowa, the senior Republican on the panel, noted that as Treasury secretary, Geithner would be in charge of the Internal Revenue Service and should therefore come under especially tight scrutiny on the issue of paying his personal taxes.

He suggested the danger of “sweeping the under the rug” Geithner’s tax problems in a rush to get him confirmed.

“I have paid what I owed,” Geithner said under grilling from Grassley. “I apologize to the committee for putting you in the position of having to spend so much time on these issues.”

Republican Jim Bunning of Kentucky told Geithner his failure to pay the taxes fully until just before his selection by Obama was announced was “hard to explain to my constituents who pay these taxes on a regular basis.”

Although the tax disclosures provided a bump in Geithner’s confirmation process, he appeared to have wide support from both parties, especially given the severity of the downturn and the nominee’s past experience in the financial system.

“You will be confirmed,” Pat Roberts of Kansas told Geithner. Still, the senator said, his phones were “ringing off the hook” from people in Kansas complaining about the prospects of having a Treasury secretary who was careless in tending to his own tax liabilities.

Grassley said he recognizes that many in Congress view Geithner, who worked closely with the outgoing administration on Wall Street’s meltdown as head of the New York Federal Reserve Bank, as “possibly the only man for the job of healing the recession before us and a very fractured economy.”

“To some, he is not only the best choice, he is the only choice,” said Grassley. The Republican has not announced how he will vote on the nomination and aides say he remains undecided.

Committee Chairman Max Baucus of Montana called Geithner’s tax transgressions “disappointing mistakes,” but said he believes they were innocent ones – and should not bar Geithner from serving in the administration’s top economic position.

Baucus said his committee would vote on the nomination Thursday.

Geithner, who also worked in the Treasury Department under three presidents, addressed criticism over how the $700 billion financial bailout program has been spent so far by the outgoing Bush administration.

Many lawmakers have complained that most of the over $350 billion committed so far has gone mostly to the banking industry, and has done little to help individual homeowners facing foreclosure.

Geithner also said that Obama and he “share your belief that this program needs serious reform.”

“This is an important program and we need to make it work,” he said. “We’re going to keep at it until we fix it.”

He said the still-evolving Obama economic plan would include a comprehensive housing package.

“Senators, in this crisis, our financial system failed to meet its most basic obligations,” Geithner said. “The system was too fragile and unstable, and because of this, the system was unfair and unjust. Individuals, families and businesses that were careful and responsible were damaged by the actions of those who were not. ”

Obama last week called Geithner’s tax problems an embarrassment but an “innocent mistake.”

Geithner failed to pay $34,000 in self-employment taxes from 2001 to 2004 for money he earned while he worked at the International Monetary Fund. He paid some of the taxes in 2006 after an audit discovered the discrepancy for the years 2003 and 2004. But it wasn’t until two years later, days before Obama tapped him to head Treasury last November, that Geithner paid back taxes he owed for the years 2001 and 2002.

He did so after Obama’s transition team found that Geithner had made the same tax mistake his first two years at the IMF as the one the IRS found he made during his last two years at the international lending agency.