captioni sponsored by wpbt >> paul:he s.e.c. admits it failed tprotect investors from bern madoff and the biggest ponzi scheme in histy. the commen come as a taped madoff phone call surfes. with the swindler agging about hoeasy it is to fool regulators. >> susiepresident obama nites fresh debate over heal care reform. tonight we talwith health care expert steven lman about the reities of getting reform passed this year. paul: after four years at t helm of morgan stanl c.e.o. hn mack announced today he's stepping down. but he isn't going very fa

>> sus: reviving the family business with whacky commercials. tonight our signature series "a in the family" introduces us to the smithe broers of walter e sthe furniture. >> paul: i paul kangas. >> sie: and i'm susie gharib. this is "nightly busess report" for ursday, september 10th. ightly business report" is made possible by:

this program was madpossible contributions to your pbs station fr viewers like you. thank you. 7/ >> sie: good evening, everyone. "we're sorry and we're fing the problem. at was the response today fr the securities a exchange mmission over how it bungled five sepate investigations into bernie madoff's msive ponzi scheme. contriteegulators were called on the carpet by cgress today, ter a scathing report said t agency was incomtent. adng fuel to the fire: maachusetts state regulators released a tape of phone call madoff made,ragging about how ea it was to scam the s.e.c. stephanie dhue repor.

>> reporter: madoff kn how to work theecurities and exchange commission. in a phone call from decber 2005, madoff cched the chief risk officer of thfairfield greenwicfund about how to handle t s.e.c. before an interview with agency examins. >> we run thugh this all the me, these guys come in to do books and records examinion and they a a zillion different questions, and we look at em sometimes and we laugh a say what are you guys writing a book. these guys, theyork for five years at t commission, then they become compliance manager at a hedge fund no or they go work at proprietary tradg desk, nobody wants tstay there foreve >> rorter: the s.e.c. fielded six complaints and compled three examand two investigations over 16 yrs. but in all that timeinspectors never verified any of madoff trades through ahird party, instd trusting his word. spector general david kotz says the agency so never investiged whether madoff was running a ponzi scheme.

>> he used his knowled, generally in the industry impress the examins, so in many wayhe knew which buttons to pus he knew how to impress e examiners and he knew how keep them ofthe track that wod expose the ponzi scheme. >> reporter:he s.e.c. has clned house. the new head of the enrcement divisionrobert khuzami, omises to do better. >> simply statedwe failed in our fundamental missn to prect investors, we must coinue vigorously to reform the way we opera. >> reporter: the agency ys has beefed ustaff training, now requires 3rd party verificatn of trades and has revaed the way it hanes tips. former s.e.c. attorneyacob frenkel worrs the agency is ready going too far to clean up its image. >> iave seen that and my lleages have seen that the agen is acting in a heavy handed, bordering on imprope

maer in how its moving some of these cases very qckly. >> reporter:he s.e.c. says the madoff mistakes shouldn't ma the 75 year histy of the agency. but cleay it already has. someawmakers are considering beefing the agencies budget, but so say fundamental anges, not more money are what's needed. stephanie dhue, "nightly business report", shington. >> paul: we're no nger on the brinof economic disaster. but treasury sretary timothy geithner today told a congressional oversight nel the recovery still has a lon way to go. gehner was testifying about the government's effor to fix the financial crisis includi the rp or troubled asset relief program. he says e administration has not cided if it will extend the $700 billion financial rescue plan. he says even with the ecomy's progress, w is the time to pair and ruild the foundation of financial regulation for futurgrowth. >>usie: late today, one of thostarp recipients morgan stanley announced big chges to

its top leership. jo mack is stepping down as c.e. but staying on as chairman of the investme bankg firm on january 1, mack will hand ov the reins to the current co-president james gorman. since 2005, der mack's leadership, ares of morgan stanley have fallen abt 34%. but shares at rival goldn sachs, have sued about 70%. >> paul: stocks got off to a slow start on wall strt today, buended with another positive close, it's 5th stight session to t upside. an upbeat forecast frotexas instrumentcombined with octer & mble's prediction for improved sales tboost stocks. adding to the buishness, a betterhan expected drop in new weekly jobless benefitlaims. the upwardrend continued through the afrnoon and strong mand for an auction of 30 ye t-bondhelped the market end at the day's highs.

>> susie: president obama wa talking uphe need for healthcare rorm today a day ter his blunt address to congress. speakingo an audience of nurseshe president said the number of uninsud americans rose by 6 million inhe past year because of the cession bringing theotal to 46.3 milln. did e president's speech to the nation maka difference in

e health care debate? talked with university of miami healthcare exrt steven ullm a short while ago and asked him if president oma made a conviing case last nit. >> i think he lose dated to a much greater eent what he wanted toget across in termsf health-care reform, something th has not really comforth to date. a lot of itad been left up toongress. this washe first time that he actuay laid out a lot the pla >> steve, when you emined the present's proposal, at do you think that the president is promisinghat is right andhat is the presidt promising that is wronin your view? >> in terms of whats right, 47 milon people currently uninsured is what he is trying to get at. and to try to t them access to health care is one of theright aspects of it. al his crackwn on medicare fud, and abu and also issues associated withefficiency, bring being greater efficiency are the strong points in terms of the plan. in tms it of concernsr weaknesses that i perceive

in the pla, one tm is the issue assiatedwith a primary care network. if y are bringing all the new people into the pl r there going to be providers, physicians, nurse practitionerwho are providing primarcareo see this increased population or ll they end up itead right back in the emergency ro, or highe form ohealth care, tha is of concern >> the presidentaid lt nighthat the planould not add to federal deficits anthe cost would come from savings. when you do the math,o the numbers add up, do the costs get balanced out vings? there is a question mark there. the concept i that if are you going to increase a provision of care to ople who are currtly uninsured, costs wi indeedo up. what the obama admistration is currently indicating is by dealing with fraud a abu and tryi to bring aut eaterfficiencies a lot of that will be offset by those new innovations.

what aring one of the questionarks, ifou list carefully to the speech there ian out that president obama has. and that is the indication that if, indeed, l the cost savings are not realized that the could be adjuments in termsfow health care by the government is provided in terms it of some of their other programs. >> steve, you know tre is still a lotfebate abt the -called public option. government insurance plan as an alternati to prite surance companies. do you think that the government cano a better job? >> i think the government can provide comtitive edge in rms of progmming, in terms of health care inrance provision. but i don't think it' mission critical. i think that the are other means willing also that are available to bring about a more competitive marketplace thats just one option. >> and what out small businesses. a lot of them ght now are struggli with the high cost of providing health benefits to their employees. is there anythinthis this plan or ould be in th

plan thelp outmall businesses? >> the conces thathey are going toave basically a consoiumof small sinesses that will reduc th risk pool and allow access to private insurce through this ris pool. and if that should help alleviate somef the problemsn terms ofomef yo smaller companies not ing able to a vord rht now, health care iurance, not onlyhe small employers but also the lf-employed well. >> some of the feedback coming o fromashington today reveals that the demoats and republicans are still digging in their heels on this who debate about heal-care reform. doou think a compromise is possible? >> i think a coromise will come about. i think at you will see th there will be givend-take on this, that ceain aspects of the plan will probay fall by the wayside in terms of excess abity, in terms of perps the vernment provision care, in termsof perha the mandatory aspects of the plan, in terms of mandatory

participation by employers and also by private citizens. some of those are gog to be some of the areashat will be probably hotly debated over the nextew months but io think that something will be coming out ofongress at this point in time. >> if somethin doesn't come out of congreswhat is the threat to the economy? >> significant. significt threat. you are looking from estimates i've seepwards of 68 million uninsur by the year 2015. you are looking at per capita expendires for health care going up to about 12,000 for every man, woman and chil anin certain metropolin areas as highce 25,000 for ery man, woman and child that is an untenabl situatio iteduces our competiveness internatnally. >> wll see what happens. eve, thank you so much for coming othe program tonight. >> appreciate it. thank you.

>> paul: now, t's take a look some stocks in the news tonight.

d those are the stocks in th news tonight, sue. >> susie: paul, during tou times one the last things ople think about is buying n clothes. so the retail and fashion wods have been hit rd by the recessn. w those industries are fighting back. they're offering the firsever "fashion's night out": it'a worldwide initiave tonight, to bring ctomers into the ores. as erika milr explains retailers are lling out all thstops to make a sale. >> rorter: gone are the days en retailers can just put clothingn racks and expect it to sell.

noways, many stores find they must also crea a connection wi their brands. that's where fashion night out mes in-- it's a global retai extravaganza desigd to lure men and women into thetores with afterours events. manyell known chain stores are participating, inclung macys, and gap. in addion to high end boutiques ke calvin klein, that cpany's c.e.o. tom murry says the goal is to ge customers to buy fall shions while ey're still at full price. >> thehole idea is to create excitent about fashion. let's feel positive! and i think we have so really beautifuproduct in the stores right now. reporter: style may b important, but my shoppers also wt a deal. puttinit another way: frugal is the new black. >> reporter: alyst richard jaffe says many aprel retailers are focung on loweri the average price points in their stores. >> rather than the $10,000 purse, maybe it's make t $900 purses and attra a broader audien.

y and work down a little bit on the food chain. >> reporter: that's excted to result ifewer luxury goods in storesnd more moderately priced bridge line merchandi. you'relso likely to see more accessories, because ican be annexpensive way to spice up your wardrobe. wh it comes to clothing, many stores are pushingractical pieces, strategy that could backfire. >> the wro move-- and we will see it-- is to shift to bacs. so instead of a fancy nd knit sweater, youee a navy, grey d white cardigan. ry boring. >> rorter: fashion's night out is a one time event,o analysts don't think it will he the quarterly earnings of mostajor chain stores but retails say it can't hurt to create buzz ahead of thall important hoday season. some stores e cautiously optistic this year will be better than last. we are starting to see the early signs of a rovery in our reta sales. we are seeing more in asia and europe than we a in the united states, but we' seeing

opportunities herehere we're starting to slowly gw the business ain. >> reporter: butven if the outloois improving, that doesn't mean happy days are re again. most industry expertagree it will be ars, perhaps even a dede, before consumer spending returns to its 200high. ika miller, "nightly busines report", new yor >> paul: tomorrow, our fday "market monir" guest is erik stuben chief investmt officer at russell invtments. >>usie: sprint nextel is calling on new ctomers with a nepricing plan. it's called "any mobil anytime." the tion's third largest wireless provir is offering users unlimited callg to any cellphone the country no matter which netwo it uses. the new plan starts at aut $70 a month. sprint's offer comes as strules with heavy subscrir losses as customers defe to rivals veriz and at&t. >> pau general motors is selling a major portn of its european ol division to

cadian auto supplier magna. toy's announcement ends months of uncertainty over the fa of gm best-selling european brand. undethe plan, magna, along own 55% of opel.eebank will opel employees would hd 10% leaving gm with 35% stake. gm sees e deal closing in november or dember.

>>usie: here's a look at what's happening tomorro >> paul: recappingoday's market actn, stocks are higher for the 5th straightay. the dow gained 80 points and the nasdaq gned 23. to learn more about the sties in tonight'sroadcast, to watch r streaming video and to tak part iour daily blog, go to "nightly business rert" on pbs.org. you can also email us at nbr@pbs.org. >> susieand finally tonight, family businesses account fo roughly four of ery five americanompanies. so tonight, we bring you t latest installme of our signature seri "all in the fami, looking at the challeng of integrating work and family. diane eastabrook introduces to walter e smithea chicago area fniture chain building its family buness for nearly five dedes.

♪ ♪ >> walr e.mithe. you dream , we build it. >> reporter: in chico, the smithe brothers d their wacky tvds are as famous as the furniture stores that ar their grandfather's me. >> tim, rk get back to work. >> reporter: waltee. smithe rniture has been a chicago staple for more than half centy. but sales skyrocted after mark, m, and walt took to the airwaves nine years ag we decided in 2000 that we want to come up with something that would be diicult for competitors toteal and we wanted to kindf give a face to the company and so wthought making the brothers thbrand persality would accomplish that. >>he smithe brand got started after world war ii whewalter e. smithsenior opened a chicago appliance and rniture

store. in the 1960's son walter junior took over focusing on rniture. at that same time waer junior's three inseparable ss who loved clowning around, often beforeome movie cameras-- began honing their own entrepreneurial skills >> we d a beer can collection d we would go to flea market and sell beer ca. so, we really got into biness 30 yeas ag i had a paper routand tim used to sep on the floor-- you know he's fo years younger than i am-he'd sleep on the floor so he could help me doy paper route in the morning >> reporter: t brothers joined e family business in the early 1980s, expanding the cpany from one store to 13. but despitthat growth, the smithes think e commercials have held the chain keepts small businessppeal. >>eople will pick up the phone and call you if the's an issue or aroblem. that's one of e great things abt family business. often times there is tt contact. >> we are lling action. >> reporter: most the commercials e shot in the

stes. tim is t head script writer. >> the early scripts wervery heady. and we'd wte a paragraph and everyone would say it. d we found the more serious were the funnier we were becse we're just notery good actors. >> reporter: mark ys the public insntly connected with their raacting skills. >> i was in starbucks e time and this was years ago when just started the commercialsnd the guy ts the latte up and says that's a latte with ae, ha ha. that was reallcute and that's e first time i remember someone recognizing us >> reporter: as savvy businessmen the smhes know creative tv ads may aw customers in their stores, but they may not necessarily mov merchandise. walter. smithe senior's favorite motto was, forever better. walt says his grandfatr's words motiva every business cision he and his brothers make. we're looking to improve towards what you already he-- whether it's ourtaffing, our advertising, whethert's the appearan of our stores. in aashion business you are

constantlyorking on maintaining thfashionability ofhat you're trying to sell. >>eporter: the smithes truly love promoting what ey sell and nevemiss an opportunity to do it, even with us. >> okay, onetwo, three. walter e, smitheou dream it we bud it. i love that song. do you want the second verse ( laughs ( applause ) >> reporter: dne eastabrook "nhtly busness report" glendale heights, illinois sure lks like they are ving a lot of fun. it works. >>ure does. >> sus: that's nightly siness report for thursday, september 10. i'm susie gharib. goodnight, everyone. and good night to yo paul. >> paul: gdnight susie. i'paul kangas wishing all of you the best of goo buys. "nightly business reportis made possie by:

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