HOULIHAN: No one in the federal government is yet telling women, "Canned tuna has a lot of mercury in it. You should limit your consumption of canned tuna when you're pregnant."

ANNOUNCER: Why hasn't the Food and Drug Administration warned the public? And Tony Blair got a royal welcome in Washington, but just listen to what he's hearing at home.

SMITH: The truth is nobody believes a word now that the Prime Minister is saying.

ANNOUNCER: Bill Moyers talks with historians Niall Ferguson and Simon Schama on empire and democracy.

And the red ink from budget deficits threatens to drown community health care in California.

KIM: If they don't have anything like this, I'll be in trouble.

ANNOUNCER: All that tonight on NOW WITH BILL MOYERS, the weekly newsmagazine from PBS.

ANNOUNCER: From our studios in New York, Bill Moyers.

MOYERS: Welcome to NOW. Once upon a time, this little tin of tuna was a big staple in the Moyers household. Then we started reading about something called methylmercury.

That's a toxic poison formed when mercury in the atmosphere falls into the earth's water and then works its way back up the food chain collecting in the tissue of mammals like dolphins and whales, and fish like swordfish and tuna.

Because mercury has been linked to neurological disorders, we reluctantly decided to moderate our appetite for what had been a common source of family protein and pleasure.

Naturally we were pleased when President Bush announced that he wants to cut mercury emissions by at least 50% over the next seven years.

Somewhat over a third of the mercury released into the environment by American industry comes from coal-fueled power plants generating electricity.

We were cheered again just this week when the CHRISTIAN SCIENCE MONITOR reported that worldwide mercury pollution has actually dropped by 17% since the late 1980s.

Is it possible, we asked ourselves, that in our lifetime we could pop open a can of tuna without thinking about what else is in here? Alas, not yet.

Some 5,000 metric tons of mercury are still being deposited worldwide every year, and two international health organizations have just cut in half their recommendations on how much mercury humans can safely consume in our food.

Here in the United States, we look to our own Food and Drug Administration to be our watchdog on the safety of what we eat.

So how's the FDA doing on the matter of mercury in tuna? That's the subject of this report by NOW's senior Washington correspondent Roberta Baskin, and producer Katie Pitra.

BASKIN: It's no surprise that America has become a nation of fish eaters. We've been told repeatedly that fish is a good source of protein and omega-3 oils that are healthy for the heart.

But there are risks as well because some fish contain high levels of methylmercury, a toxic compound that has long been known to disrupt the nervous system, especially in children and the unborn.

HOULIHAN: There are some kinds of seafood that have too much mercury in them to be safe for pregnant women — canned tuna is one of those.

BASKIN: Jane Houlihan is with a Washington-based consumer lobby called the Environmental Working Group. The group is looking at mercury in canned tuna because it's the most widely consumed of any fish. In fact, after sugar and coffee, canned tuna is the most popular product on grocery store shelves. When consumed regularly in large amounts it may pose a health risk. So why haven't you heard about it? Because the federal agency in charge of monitoring the food supply, the Food and Drug Administration, hasn't specifically mentioned "tuna" in any of its advisories.

HOULIHAN: No one in the federal government is yet telling women, "Canned tuna has a lot of mercury in it. You should limit your consumption of canned tuna when you're pregnant."

BASKIN: And, advocates say, the lack of warnings about mercury in canned tuna is a case study of how everyday people can be put at risk when a government agency gets too close to the business it's supposed to regulate.

SUSAN: I had had no indication from any source of newspapers, magazines, television, any sort of reporting that there was a problem eating too much fish, eating the wrong kind of fish. Tuna fish, everyone lives on tuna fish sandwiches. It's kind of a staple.

BASKIN: Her name is Susan and she asked us not to use her last name. She lives right outside San Francisco. She was eating what she thought was a healthy diet, up to nine servings of a variety of fish a week, including tuna, but her health began to fail.

SUSAN: I had the feeling that I was coming down with the flu for a long period of time. It just was like a flu that didn't go away.

BASKIN: Susan complained of hair loss, fatigue and achiness. And after seeing several doctors, with no results, she started to see Dr. Jane Hightower, one of San Francisco's top internal medicine specialists. Dr. Hightower asked Susan the same peculiar question she had began asking many of her patients who were suffering from similar symptoms, "How much fish do you eat?"

HIGHTOWER: And I called her up. And she said, "I eat fish all the time."

BASKIN: Dr. Hightower suspected mercury poisoning and had already begun testing many of her patients. The test results showed Susan had extraordinarily high levels of the neurotoxin. According to one government guideline, she had nearly 15 times the acceptable level of mercury in her body.

SUSAN: I had 76 milliliters per unit in my blood stream. So this was pretty serious.

BASKIN: Dr. Hightower's tests of 116 of her other patients who, like Susan, ate a lot of fish regularly, showed nearly 90 percent of them had unacceptably high levels of mercury. She reported the results in this peer reviewed journal, ENVIRONMENTAL HEALTH PERSPECTIVES.

HIGHTOWER: These were all very intelligent people. Sometimes they would say, "Oh you gotta be kidding! This is supposed to be good for you. The fishing industry tells us to eat it. The FDA tells us to eat it. The American Heart Association tells us to eat it. How could you say that it has a contaminant that they're not telling us about?"

BASKIN: Even before Dr. Hightower's paper, the FDA was considering what to tell the public about mercury and fish. It even came out with an "advisory" in 2001, stating that women of child-bearing age and children can "safely eat 12 ounces per week of cooked fish," but it must be "a variety of different species." Also, avoid shark, king mackerel, tilefish and swordfish. But there was no mention of tuna.

BASKIN: It's a much more widely consumed fish.

ACHESON: For sure.

BASKIN: Dr. David Acheson is the FDA's chief medical officer overseeing mercury and fish.

ACHESON: The advice clearly states that you shouldn't eat more than 12 ounces of a variety of fish in the course of a week. So a person who is consuming multiple cans of tuna in a week actually is not following our recommendation and advice.

BASKIN: Do you think that the message is out there, that women are hearing that they should not eat a lot of tuna fish?

ACHESON: The message is out there. Whether everybody's hearing it is another question.

BASKIN: Apparently, everybody's not hearing it. The Environmental Working Group has completed an analysis of how much tuna Americans really eat. And it's a lot. They examined the tuna industry's own data and discovered seventy five thousand women of child-bearing age eat more than twelve ounces of tuna fish a week.

PALLONE: I think it's a travesty… basically puts pregnant women at risk.

BASKIN: New Jersey Congressman Frank Pallone is the top democrat on the Fisheries, Wildlife and Oceans subcommittee. He says it's significant that the FDA does not mention tuna specifically in the advisory.

PALLONE: They didn't suggest in any way.

BASKIN: What does this suggest to you?

PALLONE: Well, it shows to me that the tuna fishery and the industry has a lot of influence over the FDA. We of course have known that over the years but that, I think, confirmed it.

BASKIN: Back in 2000, the FDA held a series of focus groups to test how the public would respond to its advisory on mercury in fish.

HOULIHAN: At the time of the focus groups, FDA had firm advice that women need to limit their consumption of canned tuna.

BASKIN: Last year the Environmental Working Group filed a Freedom of Information Act request to obtain more than a thousand pages of transcripts of eleven focus groups the FDA had held around the country and discovered something troubling…

HOULIHAN: Canned tuna was on the advisories FDA gave to the focus groups and it was completely stripped from the advisories in the final public consumption warnings for pregnant women.

BASKIN: But why? When the FDA was preparing its mercury advisory almost three years ago, the tuna industry filed comments saying that if canned tuna was added to the FDA's "Do Not Consume" list it could have a negative impact on sales and "the total canned tuna market could decrease by 24%.…" Critics say the agency has apparently been giving more weight to the health of the industry than the health of the consumer.

HOULIHAN: When we probed into the possibilities of why it fell of the list, one thing that turned up was that FDA did meet with the tuna industry three times while they were crafting their final advisory.

We'll never know how much influence the industry had but they certainly have open access to FDA.

BASKIN: The FDA says it must strike a balance. It wants consumers to be aware of the potential dangers of mercury in fish without scaring them away from an affordable food with widely acknowledged health benefits.

Critics suspect there's more to it. Internal memos reveal when the FDA was formulating its "Do Not Consume" list, the tuna industry pressed its case against a stricter advisory saying, quote, "The U.S. canned tuna industry would face the distinct possibility of numerous class action lawsuits."

Even so, the agency rejects the idea that the industry had any undue effect on its decision not to specifically mention tuna.

ACHESON: From the FDA's perspective, the tuna industry has no more influence than anybody else. They do not influence this process. They have an opinion which we solicit. We listen to, as does everybody else. But they do not have influence over where we ultimately end up.

BASKIN: Still, the FDA ultimately ended up with a warning that posed no threat to the tuna industry.

BASKIN: In terms of getting information out, what would be the effect on the tuna industry if there were stricter warnings about tuna fish and mercury?

MILLER: It probably would hurt consumption.

And in that sense it would probably hurt the industry. And it would be a detriment to the consumer because they could cut back on eating fish and if they eat a lot of tuna fish, then they'd be cutting back on the Omega 3's and all of the benefits that go along with eating fish.

BASKIN: Melanie Miller heads up Communications and Marketing for the US Tuna Foundation which represents the canned tuna industry.

BASKIN: What about putting some sort of label on the tuna can that tells people about mercury?

MILLER: That scares the consumer when you start putting labels on things, warning labels, it scares the consumer away. And we don't wanna scare the consumer. We wanna give them information that they need.

BASKIN: Is that putting profits ahead of public health risks?

MILLER: No. Because we don't feel that it's a public health risk as far as eating canned tuna.

BASKIN: Miller cites an ongoing study of Seychelles Islanders which has found no apparent harm caused by the consumption of large amounts of fish with mercury. But when the National Academy Of Science reviewed that and hundreds of other studies, it remained concerned about mercury levels.

While the industry doesn't think there's a health risk, the FDA does have a so-called "action level" of one part per million, meaning tuna with mercury levels that high could be subjected to a recall. But that's unlikely because the FDA only tests a dozen cans of tuna a year.

BASKIN: Does the tuna industry report its test results to you?

ACHESON: No. The tuna industry does some of its own testing, I believe.

BASKIN: They do.

ACHESON: We do not expect them to share those data with us. If they choose to, they certainly…you know, they're at liberty to do that.

BASKIN: There was a time the FDA was tougher when it came to mercury and fish. In the early 1970's the FDA took action to recall nearly a million cans of tuna after finding high mercury levels. But in 1978, the FDA tangled in court with the fishing industry over mercury in swordfish and lost. After that the FDA loosened its standard.

BASKIN: But when you hear that a can of tuna, let's say, is over one part per million, over that "action level" is there any action that's taken?

ACHESON: In my experience at FDA that situation has not arisen where somebody has come up with a can of tuna that is greater than one part per million and asked us to take some action based on it.

BASKIN: While Americans are buying more than a billion cans of tuna every year, what do the industry's mercury tests show?

BASKIN: Do you ever find levels that are above one part per million when you test?

MILLER: They probably do. But in most cases, if there's a higher level, they will eliminate those findings, or eliminate that tuna and not put it on the market.

BASKIN: But tuna with high levels of mercury is apparently getting on the market. A watchdog group, the Mercury Policy Project, just recently announced its own results after testing 48 cans of albacore tuna taken right off supermarket shelves. That's the type of canned tuna everyone agrees tends to have the highest methylmercury levels. Michael Bender is the project's Executive Director.

BENDER: What we found in our sample of 48 were that three cans of tuna were at or above the one part per million action level which is over six percent of the samples tested. Which is a significant amount.

BASKIN: Six percent may not sound like that much, but there are 375 million cans of albacore tuna sold each year. So if those numbers held up, that means as many as 22 million cans could have mercury levels above the FDA's action level. And what's more, the FDA guidelines are much weaker than those of another federal agency, the Environmental Protection Agency.

For example, a 45-pound child eating one 6-ounce can of chunk white albacore tuna per week would be fine under the FDA's standards. However, by the EPA's guidelines, that child would be ingesting almost four times more mercury than is safe… but the EPA doesn't regulate commercially caught fish.

BENDER: When people hear that kind of mixed message they just throw up their hands and say, "I'm not gonna do anything until this science gets clear on this."

BASKIN: Last July, the FDA's own food safety committee recommended it was time for the FDA to re-evaluate its advisory. It suggested the FDA and EPA produce a combined message and that the new advisory put more emphasis on children. A year later, the FDA is still reviewing the committee's recommendations.

BENDER: It's just an ongoing perpetuation of delays that this agency is engaging in to the point where it starts to look more like a trade association than a federal government agency.

BASKIN: In the meantime, ten states aren't waiting for the FDA to act. They've issued their own advisories, specifically warning about tuna consumption per week for women of childbearing age and young children. States such as:

Connecticut: limit canned tuna to "1 to 2 meals a week" and "choose light tuna";

Minnesota: "6 ounces of canned tuna" each week; and

Washington state advises for children under age six, "eat less than one half a can of tuna per week." That's only about one sandwich.

BASKIN: Why are so many states beginning to send out their own advisories about mercury and fish? With some of them actually saying, you should watch your intake of tuna.

ACHESON: Well, the FDA also states you should watch your intake of tuna. Tuna falls into that category of a variety of fish. We don't mention tuna specifically. Right now we're looking at how best to do that.

BASKIN: Remember Susan? While the FDA studies the problem, she's taken her own action.

SUSAN: About seven months after being told to stop eating fish, my blood stream showed that there was no longer the mercury present.

BASKIN: And for many of Dr. Hightower's patients, this has become more than just a medical issue.

HIGHTOWER: They're feeling betrayed. They've been betrayed by our government by who's supposed to be regulating these things. And betrayed by the industry who's keeping it a secret.

MOYERS: It won't be a simple thing to cope with mercury.

Even if all sources of new mercury were shut off, the CHRISTIAN SCIENCE MONITOR reports that there would still be 200,000 metric tons of the stuff that have accumulated since Roman times.

Environmental groups like the Natural Resources Defense Council want more stringent regulation of coal-fired electric plants than President Bush has proposed.

The administration and industry say that would drive up the cost and use up the supply of fuel needed to generate power.

There is an August 1 deadline for the Environmental Protection Agency to submit to the White House a draft on new rules for mercury emissions from those coal-fired power plants.

You can find out more at pbs.org.

ANNOUNCER: There's more to come on NOW. Can a health clinic stay afloat in the midst of California's fiscal crisis?

IVIE: Whether we're rich, whether we're poor, we're all in this boat together.

MOYERS: In Washington yesterday, you might have wondered if the American Revolution had been revoked.

The British were back, and in the city the redcoats once burned, they were hailed now as conquering heroes. Tony Blair's address to a joint session of Congress was his reward for America in the invasion of Iraq. In American sports parlance, he knocked it out of the park.

BLAIR: I am deeply touched by that warm and generous welcome. That's more than I deserve and more than I am used to, quite frankly.

MOYERS: Blair told Congress he hadn't forgotten the Library of Congress books that also went up in smoke in 1814.

BLAIR: I know this is kind of late, but sorry.

MOYERS: The Prime Minister was then treated to dinner in the very White House to which British troops had also once put the torch.

Back home in London, Blair still faces what Brits would call a sticky wicket. One British tabloid called his speech "claptrap," and you might have thought that he, not Saddam Hussein, had lost the war.

His standing in the polls has dropped from almost 90% two years ago to about 1/3 as his opponents accuse him of going to war on the basis of misleading intelligence about weapons of mass destruction.

IAIN DUNCAN SMITH, CONSERVATIVE OPPOSITION LEADER: The truth is that nobody believes a word that the Prime Minister is saying. Will he now either publish that dossier right now, or hold an independent inquiry so that the public can judge for themselves?

MOYERS: Here to talk about this are two historians, both British, both living here in the United States. Niall Ferguson teaches at New York University, and is a senior fellow at Oxford. His most recent book is EMPIRE: THE RISE AND DEMISE OF THE BRITISH WORLD ORDER AND THE LESSONS FOR GLOBAL POWER.

Simon Schama has been a frequent guest on our program. He teaches at Columbia University, wrote the multi-volume A HISTORY OF BRITAIN, and is the star of the BBC television series of the same name. Gentlemen, welcome.

Would you agree that Tony Blair got a royal welcome in Washington?

FERGUSON: I don't think Americans do royal welcomes. But he maybe got an imperial welcome. Certainly something imperial about the ovation. And one could see that Tony Blair was loving every second of this because as he himself admitted, he doesn't get that kind of reception back home.

I think this might have a big Gorbachev factor. When a political leader becomes more popular abroad than he is at home. And I think that's the real significance of this episode.

MOYERS: The British press is beating up on him this morning.

FERGUSON: Right.

MOYERS: They're relentless.

SCHAMA: Yeah they are and one's tempted to say that, you know, he thrives on adversity, that he would sort of drink it off. But actually, I don't think he does.

Some of the great figures in British political life since the war, Mr. Churchill and Mrs. Thatcher, pretend to have a kind of bulldog pugnacity. But actually, they love adulation and apotheosis, really.

There is a sense, though, the newspapers may be a bit misleading. Because despite our sense here on this side of the Atlantic that there is a very fierce phobic anti-American vein going on in Britain now, the fact is actually the kind of taxi driver working-class constituency seeing our lad Tony adored by, you know, rising the crest of the wave of roaring applause. To them, it feels like a kind of, you know, a conquest, actually, in some ways. And I think they drink in it.

MOYERS: But two thirds of Britain said in a recent poll that they believe Blair misled them. Most Americans, our surveys show, still believe Bush waged the war in good faith. How do you explain the difference in public attitudes?

FERGUSON: 9-11.

MOYERS: 9-11.

FERGUSON: Simple as that.

SCHAMA: Right.

FERGUSON: The British public has not has the experience that the public of the United States had in September 2001. And after 9-11, a great deal more slack was cut to the American government than has been cut for decades.

SCHAMA: But I would also say that when, Bill, you say, "Well, you know, large majority still believes the war was carried out in good faith," I don't disagree with that view. A distressingly large majority in the opinion poll I seem to remember reading, still believe that Iraqis were primarily responsible for 9-11, for the attack on the World Trade Center.

It wasn't exactly a hard sell to say, "Look, there is a connection between what we must do in Iraq and what happened to us on 9-11," a connection which still remains to be proven.

MOYERS: But in his speech yesterday, Simon, he shifted the ground. He was saying that even if no link is found between… is proven between weapons of mass destruction and terrorism, those are irrelevant anyway. What's really important is that he and the United States got rid of a brutal dictator, Saddam Hussein. And that, he said, is how history will judge us.

SCHAMA: Right.

FERGUSON: But that was not the legal basis for intervention in Iraq.

FERGUSON: And…

MOYERS: The legal basis.

FERGUSON: The legal basis was that Saddam Hussein was not cooperating with weapons inspectors…

SCHAMA: Well…

FERGUSON: …and may very well have had weapons of mass destruction. That's why the war happened. And the fact that Mr. Blair justified this intervention with intelligence that had been, quote, "sexed up," that allegation is a very, very damaging one in the British Parliamentary system.

SCHAMA: It was not only not the legal basis, the basis on which the war was sold to the public of the United States, to the American public, as well as to the British public, was that the war is necessary as an act of self-defense. That it would be a disgraceful abdication of the first responsibility of the Commander-in-Chief, Prime Minister and President, to walk away from something which was transparently an unparalleled imminent danger.

MOYERS: The notion that Saddam Hussein had nuclear weapons.

SCHAMA: Right absolutely.

MOYERS: Or some weapons that he was going to…

SCHAMA: That's what I supported, actually. Ultimately, that's what turned me into a supporter.

MOYERS: Well, we know in 1991 he did.

SCHAMA: Right.

MOYERS: He was out to develop a weapons system that he could intimidate the West and other… and his neighbors with.

SCHAMA: But what Tony Blair said yesterday, moving from that position to say that even this should turn out… even if that judgment should turn out to be wrong, and based on dodgy intelligence, it was necessary and a good thing that we embarked on the war. There was no possibility of selling the war to either the American or the British public. To say, "This is a crusade on behalf of democracy. Our empire will be an empire of social, moral, and political engineering." Try that on Duluth. Try that on Aberdeen. I don't think so.

MOYERS: Look, you both are historians. Condoleezza Rice, the President's national security advisor, said on Fox News, quote, "It's simply revisionist history for people to suggest there was no reason to believe the Iraqis had weapons of mass destruction." What do you historians make of that?

FERGUSON: Well, I'm actually quite sympathetic to both Mr. Blair and Mr. Bush and Condi Rice on this. Even if there was a one percent chance that Saddam Hussein had weapons of mass destruction and was not cooperating with the U.N. inspectors to conceal that fact, that provided an adequate basis for military intervention.

To be honest, I think this whole media storm in Britain is a storm about the wrong question. It's a storm about the past. Whereas the real issue, the issue we should be pressing both Blair and Bush about, is the future of Iraq.

If you think that you can transform Iraq, which has been reduced to the status of a sub-Saharan African economy by Saddam Hussein's tyranny, if you can restore that to not only functioning free market economics, but to democracy, in a time frame that nobody seems to regard as being more than four years, and at the early stages of this campaign, was supposed to happen within 12 months, you are fantasizing.

MOYERS: It took you guys how long to fail?

FERGUSON: Well, we've spent 40 years trying…40 years trying to transform Iraq. After the first World War until finally, you withdrew your support for our position in the late 1950s.

Now how many Americans seriously think they're going to be in Baghdad in the year 2043? Not one, I would venture to suggest.

MOYERS: You're saying we're in denial?

SCHAMA: Yes.

FERGUSON: You're in denial about the extent of the project that you've undertaken.

MOYERS: Can't afford this, or we won't afford it?

SCHAMA: America, as we've both said, is in terrible denial about what the time scale, the costs. You can't have run this kind of empire of political change on a kind of, you know, Wal-Mart basis. You can't… a tax cut empire is an oxymoron.

MOYERS: And you…

SCHAMA: It's an oxymoron.

MOYERS: What do you mean you… we have a tax cut empire?

FERGUSON: Well, I think the point is that this whole thing has been done on the cheap. It seems to me that many, many people in this country have been deeply shocked by two pieces of news this week.

One, that the cost of occupying Iraq currently runs at around about $4 billion a month. Two, that this year's federal government deficit is going to be going on for $500 billion.

Now these figures are, by no means, unrelated. They tell us a very important story. Because if that is the cost of the military occupation of Iraq, what will the cost be of the economic reconstruction of Iraq?

SCHAMA: Right.

FERGUSON: So far, nobody has put a figure on that in the administration.

SCHAMA: Right.

FERGUSON: And if that isn't achieved, if there's no economic reconstruction in Iraq, then it will simply become a kind of God forsaken Haiti on the banks of the Tigris.

SCHAMA: I'll tell you why that hasn't happened, because it's actually a gigantic, you know, piece of schizophrenia going on in the current administration. Doing Iraq properly, democratically and economically, is a maximilist enterprise.

MOYERS: A what?

SCHAMA: A maximilist…

MOYERS: Which…

SCHAMA: It's a big government enterprise. There's a big… remember those words? Big government, Bill?

MOYERS: I do.

SCHAMA: Sound familiar?

MOYERS: Present at the creation.

SCHAMA: You were indeed. But, I mean, that's what it is. It requires people, money, commitment, for a long time on a large scale. That runs counter to every instinct in the present American administration, which is minimalist, which is no government is good government. I mean I don't know how you possibly square that circle.

MOYERS: What's your greatest concern right now for this government?

FERGUSON: My greatest concern is that the timeframe is unrealistically short, and the resources are not being committed to, quote unquote, "nation building." Let me give you an illustration of just how serious this problem is.

We've all forgotten about Afghanistan. One and a half years on, we're supposed to be nation building in Afghanistan for one and a half years. Do you know how much money the American government has given to the government that it installed in Kabul? The answer is $500 million.

Now $500 million does not go very far when you're trying to transform a country like Afghanistan. And it seems to me that is a measure of the completely negligent way in which this government is approaching the project of nation building.

It's criminally irresponsible. When Al Qaeda came from Afghanistan, it came from anarchy in Afghanistan to perpetrate the crime of 9-11. And yet, we're allowing Afghanistan to slide back into anarchy just one and a half years after military intervention. That…

SCHAMA: If W-1 still lives. W-1's say we're not in the business of nation building. And you know…

MOYERS: President Bush the first?

SCHAMA: President Bush the fir… well, I mean… I don't mean elder Bush. I mean Baby Bush. Excuse me, the President. I mean he said the campaign was, "We are not in the business of nation building." Now despite everything that's happened since 9-11, he still sort of believes that.

MOYERS: But you know, I've read so much that each of you has written on this. You seem to think that Americans should take up this burden, that we should replace the British Empire as the power around the globe. And you have doubts about that.

SCHAMA: I do. I just… I find it… I've been in this country approximately 28 years longer than Niall, I think. The old geezer strategy again. I just find it…

MOYERS: And you're a citizen, right?

SCHAMA: …inconceivable that actually if properly and honestly and truthfully and comprehensively educated about what this imperial burden means, it could ever be sold to the American electorate. There's something about Jeffersonian America, something about deep America in the heartlands, that does not want to be in that imperial position.

MOYERS: But we're a business society now. And business exists to spread, to grow. We're a commercial society. Doesn't that make a difference? When…

SCHAMA: Kellogg, Brown and Root cannot build a… It can build a road, it cannot build a democracy.

FERGUSON: Nor can Wal-Mart and that certainly grew a third. But it does seem to me that the project is not a wholly unrealistic one, despite admittedly, the lack of a firm basis in the American network foreign nation building for a quasi-imperial project. It still seems to me to be absolutely crucial that the United States makes this work.

If it's serious about the war against terror. Because terrorism breeds in failed states and situations of civil war. And in tyrannies and despotisms. And if we allow countries like Afghanistan and Iraq to remain failed states, and worst of all, worst of all to remain failed states with American military occupation as a kind of veneer of nation-building, then we'll end up with the worst of all worlds.

We'll end up with a situation which there are breeding grounds for terrorism, which nevertheless can be described as American colonies. It's an awful combination.

MOYERS: But how do you want us to pay for it? How do you want us to carry it... When you were out running the world you had civil service…

FERGUSON: No, no.

MOYERS: …that grew up to go out and run the world. We don't have that.

FERGUSON: The American economy is the biggest economy in the world. It accounts for around about 30 percent of world's GDP. Even under… even if it's very high, Great Britain's economy accounted for no more than 10 percent of world output. You're vastly richer than we ever were.

Your military advantage are far greater over your rivals than Britain's ever was. It ought to be possible, surely, to successfully launch a Marshall Plan for Afghanistan, a Marshall Plan for Iraq. You did it for West Germany, you did it for western Europe after the Second World War with huge success. Also for Japan.

American troops remain in those countries to this day. It's not as if America hasn't successfully brought about nation-building, transformation, democratization in rogue states in the past.

SCHAMA: Germany had a democratic parliamentary and constitutional past before the Third Reich. Iraq doesn't.

FERGUSON: Well, I don't think that that necessarily precludes a successful transition in Iraq. Iraq has not always been under Saddam Hussein. He's only been in power... was only in power from 1979 under British rule a constitutional monarchy which was not a model democracy. But nor was it a despotic planned economy. In fact it was a market economy.

MOYERS: What are the consequences of an imperial role for America on democracy at home?

SCHAMA: Well, I don't think they're necessarily baleful but I think they're not particularly auspicious. Again in terms of how you make it work fiscally. If you're going to commit the kind of resources actually, which go way beyond even, you know, five billion dollars, four billion dollars amount for what we're talking about. Obviously, and the deficit is just gonna become, you know, balloon astrally even by Ronald Reagan's standards.

Something has got to give. And we've already had a seriously degraded infrastructure. States... all the problem and pain has been shoved off on some states really. They're having real trouble fixing the potholes, paying the teachers, putting enough cops on the street, doing all that kind of thing.

It's weird in a way because when you mention the Roman Empire, one thinks of there being a natural fit, a natural match between prosperity and power at home in Rome and the kind of projection of that prosperity, power, education, engineering abroad.

Here we're, I think, in more painfully zero- sum game. The more we actually are prepared to transfer those resources the more the struggle to actually keep our sense of a well-managed society at home will be.

FERGUSON: I wouldn't draw such a sharp distinction. I think it was no coincidence that the movie GLADIATOR was such a hit when it came out, what was it? Last year? Russell Crowe's great line, "Are you not entertained?" seems to me very appropriate here. The American public is entertained. It's more entertained than any populace has ever been in all history.

It's entertained by multiple television channels. By an endless stream of movies. By sports, more or less 24/7. And yet, while that entertainment goes on in the great coliseum of the American media, American soldiers are out there on the imperial borders, waging pretty thankless wars against the barbarians.

Does anyone back home in the Coliseum give a damn about the guys on the front line? I don't know in the end whether that disjunction between entertainment at home and peripheral border wars is not a very Roman disjunction.

MOYERS: Empire is entertainment?

FERGUSON: Well, no. In a sense the entertainment is there to distract the populace from the Empire. To distract it from the problems of the imperial frontier.

SCHAMA: A lot of dangerous circuses but no bread. Or not enough bread.

FERGUSON: There's no shortage of bread in this country. Let's not be unrealistic.

MOYERS: Tony Blair says America must… is the leader of the world. That's our destiny. But can you have a world leader when you have unemployment so rampant, fiscal bankruptcy, infrastructure crumbling. Can you hollow out society at home in the interest of perpetuating and maintaining…

FERGUSON: I think probably not. I think probably not. And this is the bottom line of American politics. In the end the real over-stretch that the American, quote unquote, "empire" faces is not the cost of policing Afghanistan and Iraq. It's not the over-stretch that my good friend Paul Kennedy predicted back in the 1980s. It's over-stretch at home. The over-stretch of the Medicare budget. Of the Social Security budget.

As the "baby boomers" retire, there is going to be a hole in federal finances of the order of 44 trillion dollars. So I think the real problem is not actually got much to do with America's overseas adventures. It's got everything to do with domestic finance.

SCHAMA: We were sitting here at the beginning of summer, deep into the summer. This is the debate that we must actually have in the coming electoral campaign.

MOYERS: You are debating these issues in Britain. We're not debating these. How do you explain that?

SCHAMA: No I…

MOYERS: There's an absence of…

FERGUSON: No, this is precisely what Tony Blair should have been saying this week. He should have been saying not, "We were right about WMD" and soaking up the applause like a pet poodle at a pet show. It seems to me what he should have been saying is, "Look, we've begun something here in Iraq, but how are we going to finish it? Are you in earnest about nation building, Mr. Bush? And if you are not, when are you going to get serious?"

SCHAMA: He needed to be, you know, half the bride at the altar and half the gadfly. We need a bit more gadflies buzzing around cause you know what happens to our kids really depends on the answer to this question. However the answer is actually given.

MOYERS: How do you explain the fact that Tony Blair is relentlessly under siege from the British press and the American press isn't engaging these issues. They do not challenge the President. Let me show you an excerpt from the press conference Mr. Bush had just before the United States went to war.

REPORTER: Mr. President, as the nation is at odds over war with many organizations like the Congressional Black Caucus pushing for continued diplomacy through the U.N., how is your faith guiding you?

BUSH: I appreciate that question a lot. My faith sustains me because I pray daily. I pray for guidance and wisdom and strength.

I pray for peace, April. I pray for peace.

FERGUSON: If she had asked that question in a room full of British reporters, you would have heard people shout, "Pass the sick bag!" at the top of their voices.

SCHAMA: Laughter. And you could not have asked that. And, I don't know... American press wake up! A bunch of patsies. Jeez. You know what… you need to go back to the 19th Century, some of those fierce election campaigns. And, boy, you find a bunch of unsparing bruisers really.

MOYERS: But how do you…

SCHAMA: There's a great sense of which it's somehow, you know, you're doing some damage to our troops in the field. Or you're wounding the flag. You're doing something awful to the body of America if you start to cut up rough. But jeez, God, the right wing in this country has no problems about cutting up rough at all.

MOYERS: So how do you explain the suspension of critical analysis in most of American politics in media today?

FERGUSON: I don't think there's enough competition between the newspapers in this country. One of the things that is very striking to me as a relative newcomer to the U.S., is the extraordinary dominance of a small number of broadsheet newspapers. And the small number of influential broadcasters.

But they don't compete with one another in the way that, for example, the broadsheet papers in London do. Ferociously for a very volatile readership. And they compete, partly by looking for scoops. And the best scoops of all are scoops that show the Prime Minister has misled the House of Commons.

Now there isn't the same competition here. And the NEW YORK TIMES, of course, embodies the problem. It's a complacent institution that grew so complacent it almost self-destructed by dropping journalistic standards through the floor.

SCHAMA: It's a kind of a church. You know the whole business of actually, you know spending page after page on the misdemeanors and crimes of one of its own staff was like, you know the story of the de-frocking of a cardinal or something. I don't want to know. Get on with your business.

FERGUSON: All of this was going on in the midst of a major political crisis in the Middle East and indeed in the world. Extraordinary.

MOYERS: Well, things…

FERGUSON: Is that solipsistic or what?

MOYERS: When I realized that THE ECONOMIST is very popular here and that THE GUARDIAN is coming and expecting a good reception — a very outspoken newspaper in London — I listen to you two fellows. I see the Prime Minister yesterday in the Congress of the United States. And I think who did win the war in 1776?

FERGUSON: Well, of course the answer is, that we did, 'cause very quickly we turned defeat into victory by creating something called the special relationship. A relationship which allowed Britain to pursue, consistently pursue objectives like the colonization of Iraq with American support.

I mean to anybody watching events of this year from the British imperial perspective, they had a distinctly familiar look to them. It was in 1917 that a British General arrived in Baghdad and pronounced, "We come not as conquerors, but as liberators".

So when an American President says much the same thing in 2003, you have to feel that we won. Yes, we won. We won this war.

SCHAMA: Bill, we are the matrix. Get used to it.

MOYERS: Simon Schama, Niall Ferguson, thank you very much for joining us on NOW.

SCHAMA: And thank you Bill.

ANNOUNCER: Next week on NOW WITH BILL MOYERS, Congress begins to roll back the FCC decision unleashing big media. And Republican Congressmen are joining in.

>> And I didn't get elected here to be a potted plant, and I don't really care what the White House thinks about some of these issues. For my conscience is what I will report to when I reach the end of my days, not to anybody downtown.

ANNOUNCER: That's next week on NOW.

ANNOUNCER: And connect to NOW WITH BILL MOYERS Online at pbs.org. Learn more about the hazards of mercury in seafood. British Prime Minister Tony Blair: hear the House of Commons grill him on Iraq. More on health care resources in your community. Connect to NOW at pbs.org.

MOYERS: We just heard Simon Schama and Niall Ferguson talk about how American power overseas is dependant on a strong economy at home, but these days with high unemployment and a massive federal deficit, many aspects of the domestic economy seemed to be in major melt-down.

This is especially hard on state governments, and nowhere is it worse than in our most populous state.

California faces the biggest state deficit ever. Combine that with a political recall drive using a century-old law designed to fight graft and corruption, and you have a state known for earthquakes shaken to its very foundation.

California is in such a state of turmoil that it's possible the state's next governor could be a man who can't remember the name of the current governor.

SCHWARZENEGGER: This is really embarrassing. I just forgot the name of our state governor's name. But I know that you will help me recall him.

MOYERS: That's Arnold Schwarzenegger, in case you don't know, and he's thinking about running to succeed what's his name… the present governor of California, Gray Davis.

The Terminator may not be able to recall Davis, but there are a lot of people in California who want to do just that.

MAN: Will you sign a petition to get rid of Gray Davis?

MOYERS: A petition effort to kick Davis out of office only eight months after he was reelected is gaining steam. His opponents say they have more than the 897,158 signatures needed as of this week's filing deadline, although some of the signatures are being challenged.

That's just one of the reasons things are a mess out here.

There are others: California just lost a federal regulatory ruling and must honor some $11 billion in costly energy contracts. Just what's needed in a state that is in the red by $38 billion.

I'm not making this up; there's more red ink in those hills than there ever was gold.

Last month alone, the state had to borrow $11 billion just to keep going. And in Sacramento, the legislature just missed the deadline to pass a state budget.

Every day brings new rounds of spending cuts and new fears of a rolling shutdown of state offices and services to match the rolling energy blackouts two years ago.

By the way, the popularity of the California legislature is lower even than the governor's, giving rise to the thought that if they could, voters would likely recall the entire government — legislative and executive — thus returning politics to a state of nature, anarchy, a war of all against all, not far from what exists today.

It's a fight to the death in California.

A private memo from Republican strategist Frank Luntz, which came to light today, urges the recall proponents to "trash" the governor, but it, quote, "should be done in the context of regret, sadness and balance."

"Kill Davis softly," says the memo.

Meanwhile, regular folks are left to fend for themselves.

Look at what's happening in Los Angeles County alone, the largest county in the country, where over a dozen health clinics were shut down last year.

We take a look at one clinic that's still hanging on. The woman who runs it refuses to give up. Our report is from producer Mark Mitchell. Correspondent Keith Brown narrates the story.

BROWN: The neat rows of houses and manicured lawns disguise an astounding fact. Among the residents of Southwest Los Angeles a quarter of a million people have no health insurance.

Few know the extent of the problem as well as Sylvia Drew Ivie.

IVIE: We are today coming to the realization of this huge gap in health status and we're trying to see what can be done to narrow this gap. And one of the things that can be done is to provide affordable, accessible care in community clinics.

BROWN: Southwest L.A. is one of the most economically and culturally diverse areas in the country. Sylvia Drew Ivie runs a nonprofit clinic here called T.H.E. which stands for "To Help Everyone."

IVIE: I think we have to embrace the idea that we're all in a boat together. Whether we were born in this country, whether we immigrated to this country, whether we're rich, whether we're poor, we're all in this boat together.

BROWN: Like the tens of millions of uninsured nationwide, many in Southwest L.A. don't have the money for routine visits to the doctor, and often wait until the last possible moment to get the medical attention they need.

IVIE: So, they go to the hospital when they go into labor. They haven't had prenatal care. Or they wait until a cut they got is very badly infected and they go to the emergency room.

BROWN: The clinic provides an alternative primary and preventive care to about 17 hundred people a month. More than half of those who come here don't have health insurance. To help absorb the cost of care here, the clinic has to depend on private, state and federal funding.

But the challenge in providing that care is about more than money. It's also about serving a staggering number of constituencies.

IVIE: We have a Japanese community, Latino, five or six different Asian or Pacific Islander populations, African refugees.

BROWN: You can hear 11 different languages spoken here on any given day, everything from Spanish to French to Yoruba to Thai.

KIM: If they don't have anything like this, I'll be in trouble.

BROWN: Kate Kim is from Bangkok. She is now a permanent U.S. resident and has health insurance. She first came to the clinic 5 years ago, after reading in a Thai language newspaper that it had a Thai social worker. At the time she was 5 months pregnant with no health coverage.

BROWN: Today she's brought her son in for a check-up. His name is Courage.

KIM: They follow up with you. They call you to make sure you come back here on the appointment date. And if you have any question, you can ask, it's open.

BROWN: Kim says that it takes a while for newcomers to open up and trust the process.

KIM: People who immigrate here, they don't know exactly where to go to. They come in here, they have people who speaking their languages. And they can help them, kind of guide them through, and they don't have to worry about any other, you know, because people are concerned about their status…

BROWN: She's talking about immigration status — being in the country legally or illegally. But for T.H.E. it is only a patient's health status that matters.

IVIE: They know we are not the INS. And we are not here to check on them. Our job is not to make judgments about whether they should be here. Our job is to take care of people's health needs.

BROWN: It means cutting through a lot of red tape, sitting down with patients, listening, and helping them fill out forms to get government help.

IVIE: It's a very complicated process, actually, of matching the patient to the programs that our legislators and our heath administrators have said will help to pay for this.

BROWN: Drew Ivie began her career as a lawyer. She worked for the government representing low income people who needed health care.

IVIE: And I was spending all my time fighting the very government that was funding our services which seemed futile. So I decided to leave and get involved in the direct delivery of care…

MARTINS: I want you to rest your elbow here.

BROWN: Her colleague Dr. David Martins is the clinic's medical director. He's screening this patient for hypertension, a condition that leads to heart disease. It's the cause of nearly half the deaths in southwest Los Angeles.

MARTINS: The bottom line was I wanted to see if there was a way I could see these people before they end up with strokes. So, if we can solve the hypertension problem, we will be saving a lot of lives.

BROWN: Dr. Martins stays here despite more lucrative possibilities elsewhere. In fact, most of the clinic's staff make significantly less than their counterparts at private hospitals and health centers. Now they face possible layoffs and cuts in the services they provide.

The clinic is feeling the ripple effect of California state budget cuts — some of the most severe in the country.

CLINIC WORKER: Jamie at California Wellness wants us to get our mobile mammography van to them.

BROWN: The state has slashed funding to services in almost every area, including healthcare. That includes clinics like T.H.E., already squeezed for funds.

CLINIC WORKER: "Just call her and let her know we don't have a mobile van, okay?"

BROWN: The budget crisis in California means the clinic will lose at least $500,000. That's likely to translates into the loss of seven staff members and crucial programs for thousands of patients. Sylvia Drew Ivie believes this makes the clinic's mission all the more urgent. Remember, she says, "everyone is in the boat together."

IVIE: And in order for the boat to be steady, people in the boat have to be healthy. You know, not just the people in the front of the boat, not just the people in the middle, everybody in the boat needs to be healthy.

MOYERS: Before we take our leave tonight, we have a new development on a story we've been following for quite a while.

Last week, Larry Klayman was here to talk about efforts by his public interest group, Judicial Watch, to gain access to the records of those secret meetings back in 2001 when Vice President Cheney asked executives from big energy companies to help him write the administration's energy plan.

KLAYMAN: There's something there that's being hidden. Were there energy executives behind closed doors offering up contributions for special deals?

MOYERS: Judicial Watch is a conservative organization that investigates and prosecutes government corruption and abuse, and two years ago, Klayman filed a Freedom of Information request to find out who came to the Vice President's meetings and what advice they gave. When the administration failed to comply, Klayman went to court.

Well, this week, in response to that lawsuit the government had to release several energy task force documents.

Now, keep in mind, these date back to the spring of 2001, some six months before 9/11, two years before the war with Iraq. Among them are a map of Iraq's oil fields and pipelines, and lists of foreign companies — the documents call them "suitors" — interested in developing Iraq's oil industry. These documents raise more questions than they answer, they don't tell us, for example, why the Vice President and private energy executives would be so curious at that time about those Iraqi oil fields, and why they would fight so hard in the meantime to keep their curiosity secret.

Larry Klayman told us today he is determined to find out why. What he finds, we'll report. You can link to more information via our Web site at pbs.org. That's all for NOW, thanks for watching, I'm Bill Moyers.