>> woodruff: stocks plunged on wall street today with the dow dropping more than 500 points, the biggest retreat since the financial collapse. good evening. i'm judy woodruff. >> brown: and i'm jeffrey brown. on the newshour tonight, we look the dramatic sell-off and the growing worries of an economic slowdown. >> woodruff: then, we get the latest on the bipartisan deal allowing thousands of federal aviation workers to return to their jobs. >> brown: we have a report from inside insurgent-held territory about the growing hunger crisis in somalia, from jamal osman of independent television news. >> i have heard stories of wide spread deoperation, especially among the children but nothing

prepared me for the shocking scene once i entered the main hospital. >> woodruff: margaret warner talks to michael joseph gross of "vanity fair" magazine about a global campaign of cyber espionage-- stealing secrets from governments, corporations and non-profits in the u.s. and around the world. >> brown: we continue our collaboration with "the economist" magazine to highlight the art of filmmaking. tonight, the story of an american baby made in india. >> this woman is carrying a life she can't carry, she's giving me the family i can't create. i'll never, never be able >> woodruff: and we have a conversation with new york city mayor michael bloomberg about his plan to tackle the disadvantages facing young black and latino men in schooling and jobs. that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by:

>> auto companies make huge profits. >> last year, chevron made a lot of money. >> where does it go? >> every penny and more went into bringing energy to the world. >> the economy is tough right now, everywhere. >> we pumped $21 million into local economies, into small businesses, communities, equipment, materials. >> that money could make a big difference to a lot of people. >> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy productive life. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you.

exchange. >> woodruff: the stock market finished its worst day since the financial crisis began, with the dow falling more than 500 points. investors are increasingly concerned about the possibility of another recession in the u.s. and an expanding debt crisis in europe. the dow jones industrial average dropped nearly 513 points this afternoon to close above 11,383. it is now down more than 1,200 points just since july 21. the nasdaq fell 137 points to close at 2,556. twenty stocks fell for every one that rose on the new york stock exchange. and european stocks hit an 11- month low. there's concern there that the debt crisis in greece, portugal and ireland could spread to countries like spain and italy.

for more on all this, we turn to: hugh johnson, chairman and c.e.o. of hugh johnson advisors, an investment management firm; and gillian tett, u.s. managing editor of the "financial times." and we thank you both for being with us on this day that we're all watching the markets. gillian tett, to you first, what's behind this drop? >> well, there's basically a collision of two very nasty factors. on the one hand investors are waking up to the fact that although a lot of people hopedded there's be a magic wand to get the u.s. economy growing again after the big debt bubble, history shows that whenever you have a heard of de leveraging, of cutting-- debt, growth tends to be sluggish in a while. so in a sense you have had reality striking home. but that reality striking home, the idea that growth is going to be slug harbs collided with a real sense of panic about the outlook for the euro zone and the realization that although

the leaders have been sweeping their problems under the carpet and using band-aid solutions, they haven't really nailed the core of the problem yet. >> woodruff: hugh johnson, how do you read this? how much of this is europe and how much of this is worry about the u.s.? >> i think the european problem has been ongoing, and i think part of it is europe. there's no question that that is what triggered the beginning of the decline today. but i think what's been going on, if we take a look at the last nine or 11 days, i think it is basically what you said. and that is that the economy of the u.s. is very soft. we saw the gross domestic product which is our scoreboard for the u.s. economy numbers for the first and second quarter. and they were very, very weak. so i think that's part of it. the expectation which has been built in is that this soft patch in the u.s. economy would be, to use the words of chairman bernanke, transitory, followed by a reacceleration or somewhat of a stronger economy in the third quarter. we've seen the numbers now at the start of the third quarter for the month of

july. we'll see the employment numbers tomorrow which are very important. but we've seen some numbers for july and there's no sign of a recovery or a rebound in the economy. so i think investors now are extraordinarily worried about a recession. and the world worry deeper than that is they are asking themselves the question, can the federal reserve or the federal government in washington do anything to prevent a recession, to help the economy. and the answer that a lot of us are coming up with is given the changes and all that's gone is, is probably no. >> woodruff: probably no. why is that, gillian tett? >> well, the issue right now is that they're out of ammo. i mean they've already used all the fiscal measures they've-- they could in the last two or three years. and they're pretty much as far as they can go in terms of monetary policy measures. yes, perhaps they could do q e3 but one of the big problems about q e3 -- >> and explain to you what qe3 is-- for the layperson.

>> qe3 is essentially about taking really unusual measures by the central bank to try and combat the risk of deflation. and the problem right now for the central bank is that there are signs that inflation is starting to pick up. and so there are a lot of people in the central bank right now who are saying well, if we try and extend a helping hand to the economy by pumping in lots more cash into the economy, that will create new risks further down the road. so they haven't got a lot of ammo, and that's really creating the sense that, you know, the economy's soft. what are they going to fight it with. >> woodruff: is there any contradiction here though, hugh johnson. we also keep reading that companies are sitting on a lot of cash. how does that square with this weakness this softness you're describing. >> you're absolutely right. there's two different pictures here. there's sort of the big picture, macroeconomic picture when we think about the global economy. it's obviously soft and it looks like it might even get softer and that's one side of the story. but a lot of investors, a lot of strategists are looking more at companies.

and we just came off a quarter, the second quarter when the company earnings were really strong, up about 15 percent which is a really solid number. their balance sheets, in other words, their financial conditions are in very, very good shape. we've got strong cash positions and they're doing really well with, selling things that other parts of the world as our exports expand. you have two different stories here. the one very, very encouraging part of this whole picture is that yes, i know, the stock market declined. but for corporations it declined to levels that some would argue is very, very cheap and therefore very, very attractive. that's the good part of the silver lining behind this dark cloud. >> woodruff: so how do you square that contradiction, gillian tett, and quickly bring in the european part of the equation, and why that's a worry here in the u.s.? >> they're totally related. because right now one of the things that's holding the companies back from spending that pile of cash and kick starting the economy is confidence, the magic "c" word. and you have a lot of companies and investors who remember the turmoil and

shocking events of 2008 when you had the lehman brothers problem. and the thing that is really pernicious and dangerous right now is that as you start to see the euro zone unravel or at least come under more and more stress, there are many companies saying maybe, just maybe, i'm going to hang on to my cash, i'm not going to invest. i'm going to wait and see what happens next. and that, of course, fuels the sense of a bigger downturn or at least a pause in the broader economy. >> woodruff: hugh johnson, just to try to help us understand this, you mentioned a minute ago the possibility of going into another recession, a double dip or whatever one wants to call it. what determines that? >> well, the official way of determining it is as i mentioned gross domestic product which is our scoreboard for the economy. and if you have two quarters in a row where the economy is actually contracting, that is it's actually declining in total gross domestic product, then it-- then you're back into a recession or back into what's officially a double

dip. but quite frankly, no matter what you call t a rose by any other name is still a rose. it feels like right now given the slowdown we've had for the first half of this year, and the slowdown we see in the month of july, it feels to everybody out there that this is a recession right now. but especially those that don't have jobs. especially when you look at employment conditions. yeah, we're adding jobs. yes, employment conditions are improving but at a snail-like pace, anemic pace. and certainly anemic compared to any other recovery. so you don't call it a recession yet. but it certainly feels like, and some ways looks like a recession. >> woodruff: gillian tett, come back to that question that i asked hugh johnson a moment ago, about this apparent contradiction about companies having a lot of money and yet that they are not spending it, that they are, for whatever reason, they're holding back. is that something that could be affected by some other set of circumstances or are we just watching, you know, the cargo off the cliff here? >> well, ask yourself the question that if you were

sitting at home with a big bank account and thinking about buying a house but you could see that actually there was a lot of turmoil coming up in your life, a lot of turmoil at the company you are working at, would you actually go forth and spend that money? that's kind of the question that company executives are facing right now. because they have this cash. but suddenly they can see the economy slowing down. and more importantly the shadow of financial crisis is sort of looming around the corner. and yes it's over in europe, yes it's on the other side of the atlantic but there's one thing we've learned in the last four years is that the global economy and financial systems these days is incredibly interconnected. and when something goes wrong in one corner, it has a nasty way of infecting the rest of the system in unpredictable ways. so feelings, that sense of fear, that sense of uncertainty really matters. and somehow the american economy has got to get its mojo back. the people have got to start feeling confident again. unfortunately, though, there isn't a lot that's really driving that confidence right now.

>> woodruff: so hugh johnson, if you are an ode american and are you sitting there, you don't have a lot in the stock market, maybe you have a retirement plan or so, what are to think at this point? >> well, the first thing you do is you ask yourself you can sleep at night. and if you can't sleep at night maybe you want to do something about your investments. in other words, if you can't sleep at night, maybe reduce your exposure to the stock market, find a safe haven, treasuries are still very, very safe despite what you might hear from some folks. so that's the first thing. if you cannot, if you are fine and you can sleep at night, quite frankly i've been through a lot of these before. this one like all the others will end. i can't tell you at what level. i can't tell you how long, but it will end. and so for most people i would say hold on to your investments because in time you'll be just fine. that might sound like wishful thinking, and i'm sure it does. but nevertheless, i've been through so many of these. and my guess is that is going to be the same outcome this time around. >> woodruff: well, we hope that all of us can sleep a little bit tonight. and certainly the two of you, we thank you, hugh johnson,

gillian tett, thank you. >> thank you. >> brown: still to come on the newshour: an end to the f.a.a. shutdown; the growing famine in somalia; a trail of cyber attacks leading to china; an american couple and their indian surrogate; and a new plan to help young minority men. but first, the other news of the day. here's hari sreenivasan. >> reporter: defense secretary leon panetta warned today the nation's security will be at risk if more spending cuts are made to the budget. the debt ceiling deal passed by congress earlier this week requires $350 billion in military spending cuts over the next ten years, and it leaves room for another $500 billion in cuts if a special bipartisan congressional committee can't come up with another solution in time. in his first news conference as defense secretary, panetta said that was a "doomsday mechanism." >> if it happened and god willing that would not be the case, but if it did happen, it would result in a further round of very

dangerous cuts across-the-board. defense cuts, that i believe, would do real damage to our security, our troops and their families, and our military's ability to protect the nation. >> reporter: panetta and his joint chiefs of staff, admiral mike mullen, cited a packed list of military missions: the wars in iraq and afghanistan; supporting nato operations in libya; and disaster assistance in haiti and japan. the death toll in syria's crackdown on anti-government protesters climbed higher today. activists reported more than 100 people were killed in the past 24 hours in hama, the city at the heart of the latest assault. we have a report narrated by harry smith of independent television news. >> reporter: despite four days of military operations by syrian forces, these pictures suggest that the people of hama are as rebellious as ever. reports which accompanied these postings on the internet say people have been shot dead during demonstrations in hama and other cities, including the

capital, damascus. in these pictures apparently showing the attack on hama, gunfire can clearly be heard. bullets striking the buildings can clearly be seen, but there's no way of telling where the gunfire is coming from. more pictures are emerging of tanks on the streets of hama, firing into the heart of the city. smoke can be seen billowing from streets nearby. a massive march at a funeral in a suburb of damascus. what they're chanting is: "the people want to topple the regime." >> reporter: the u.s. announced expanded sanctions against syria today. the treasury department froze the u.s. assets of a family friend of syrian president bashar al-assad and banned americans from doing business with his companies. nato officials announced the deaths of two service members in afghanistan today.

one was killed by a man wearing an afghan police uniform, and another nato soldier died after an insurgent attack in the east. rain from tropical storm emily drenched the caribbean today, but weakened to a low pressure trough as it moved toward the u.s. heavy rains started falling in the dominican republic in the middle of the night. by morning, many roads were flooded and surf was high. the storm weakened over neighboring haiti but still dumped large amounts of rain. back in the u.s., the national oceanic and atmospheric administration increased its hurricane outlook for the season, predicting seven to ten hurricanes. those are some of the day's major stories. now, back to jeff. >> brown: the nearly two-week- long partial shutdown of the federal aviation administration appears to be over, at least for now. senate majority leader harry reid announced that his chamber will pass a house bill tomorrow authorizing funding for the f.a.a. through mid-september. that will allow some 74,000 transportation and construction employees to get back to work, but a long-term funding solution remains elusive.

todd zwillich is the washington correspondent for "the takeaway," a program on public radio international, and author of the public radio blog "transportation nation." he's been covering the story closely, and he joins us now. welcome back. >> good to be with you. >> brown: so first question is how did this sidly come together? we thought everybody was gone, right? >> bilateral temporary dis-- disarmament, is what we have, the house, senate, republicans and democrats have been at a standoff for about two weeks from this. and right around the time the debt limit bill was getting done, remember that? remember how much energy that took. >> brown: yes. >> this was lingering in the background. and a lot-of-people ignored it. reporters ignored it. a lot of members of congress ignored it because they were just worrying about much bigger things. well, when the debt deal got settled and the senate was in for one more day t came time to end the standoff or not. >> brown: all right, now what i said was the senate is going to pass a house bill. >> correct. >> brown: now what does that mean? so what is the deal here? >> the senate is actually not on recess technically,

so they can do this very easily tomorrow, wave of the gavel, it's done. part of the standoff was that the house had passed a temporary authorization bill for the next six weeks, but they legislated on that. they made some changes to a rural air service subsidies that's a little bit of a bone of contention. but it's not even that controversy. senators were up set because it's not usually done. you don't usually legislate on a temporary authorization. so the reason i call this bilateral temporary disrecallment-- is -- disarmament is because the senate who refused to accept the house language has now said we'll accept it, fine. however here's why it is bilateral disarmament, the senate accepts the house bill which previously they refused to do, but the obama administration comes to democrats' rescue, uses a waiver provision in the bill to say even though the law will be on the books to get rid of this subsidy that you guys want to keep, the secretary of transportation can waive it. >> brown: wait a minute i will try to say this clearly to make sure i have got it.

the house bill took out the subsidies for these --. >> some of them, for only about 13. >> brown: the senate says okay, we'll accept that. but -- >> it doesn't have to go into effect. >> pirro: doesn't go into effect because the transportation secretary can waive that provision and allow the funding. >> can waive it for one or all of the airports. the a bomba administration has not said that he will waive it for all 13 or 15 airports that could be affected. but he has the discretion to do so. keep in mind that these airports are in places like nevada, senate majority leader harry reid, west virginia, transportation secretary jay rockefeller an other places throughout the country. and ray lahood, the transportation secretary, will have the authority now to enforce this bilateral temporary disarmament. >> brown: did he not have that authority before? >> it was always in the house bill. he always could have done this. the problem-- and republicans were saying all along, the secretary can do this if he wants to. really the problem was the stick in the eye of senators because the house had legislated where they don't usually legislate.

and also as we've talked about before, a union issue in the background, not on this bill but on a larger bill that was really a bone of contention between republicans and democrats which still has to be fought out, is not settled. that will be back. >> brown: so where does that stand? that is just unresolved. >> that's unresolved. it won't be resolved. and they're going to fight it out in september. this bill only gets us to september. and when this runs out that issue comes back on a broader faa bill. and that's about union rules. obama administration rules that govern who gets to vote and not vote when an airline or a railway unionizes, which workers have their votes count. and it is contentious. this is party ideology, unions versus management. >> brown: the senate comes in tomorrow, passes this quickly. how soon do all these workers get back to work? >> the next-- the next work day which ostensibly would be monday, workers can start getting back to work at the faa. keep in mind, the 4,000 workers at the faa can go right back to work, they're government workers. 70,000 private sector workers without work for construction companies whose

contracts have been suspended because of this mess might not get back to work so fast because it might take a little bit of red tape and some doing to get those contracts going again. >> brown: there was clearly a lot of public pressure here. was this driven by embarrassment in the end or-- or, as you said there was so much going on it just got push add side. but then it got a lot of attention. >> it got a lot of attention because the debt deal was done and then it was raid bare and everyone could see it. there was a little bit of pressure mounting. there was a backbencher member of congress, a fellow from ohio who is not well-known but called a press conference today because he was fed up. he even used some language that i don't want to use on your broadcast to describe how fed up he was. and wanted to embarrass people to get it. on both sides of the aisle, by the way, not just democrats. >> brown: okay, todd zwillich, thanks again. >> my pleasure. >> woodruff: next, the mounting humanitarian crisis in the horn of africa. 12 million people are at risk,

and the most endangered are in southern somalia, which is controlled by the islamic insurgent group, al shabab. today, secretary of state hillary clinton called on the militants to allow "unfettered" food assistance. somali journalist jamal osman of independent television news is one of the first reporters entering southern somalia. his report contains some disturbing images. >> reporter: this is baidoa, stronghold of the islamist al shabab group, whose flag flies over most of drought-hit southern somalia. al shabab say they are the legitimate authority of somalia, but america and britain accuse al shabab of being a terrorist organization. caught in the middle, these somalis fleeing the worst drought in 60 years. the old presidential palace has become a refugee camp that's swelling by the day. i'd heard stories of widespread

desperation and hunger, especially amongst the children, but nothing prepared me for the shocking scenes once i entered the main hospital. the u.n. says nearly four million somalis are in danger of starvation; the majority of them, children. mohamed janayo is in grave danger. his tiny body shows signs of acute malnutrition and dehydration. his big brother mohamud is there to comfort him, but years of not enough food has left him, too, looking much younger than he is. mohamud is 16. "my parents are out in the camp, looking for food with my four other brothers and sisters," he tells me. it's the same story next door. hamdi tells me she's been left to look after her sister, safiya.

>> ( translated ): although we've saved many lives, four, five or six children die and are buried every day. some die of diarrhea, others lack of food. >> reporter: the hospital had six rooms full of mothers desperately trying to keep their children alive. with some help from the outside world, these doctors are able to save lives. but here in southern somalia, natural disaster has been turned into famine by arguments over access. many international aid agencies, including the world food program, have pulled out of al shabab areas, accusing t group of extortion and intimidation. this is one of the most dangerous places in the world for aid workers to operate. this is the w.f.p. compound in merka. it was the second largest base in southern somalia. by this time of the year, it would have been very, very busy. but its completely empty because

they were kicked out of this area by al shabab. now, the international donors are unwilling to rush money back into the area, fearing it will end up in the hands of militants linked to al qaeda. in his first television interview with the western media, i asked the al shabab spokesman if his group was deliberately obstructing the aid effort. >> ( translated ): there is a drought, but it has not reached a famine. the famine has been averted due to support and aid from business and somali communities. >> reporter: he dismissed reports that al shabab have demanded taxes from aid agencies as just propaganda. >> ( translated ): we have only refused those who were doing more harm than good, and those agencies with political agendas. we have allowed access to all other charities. >> reporter: and as the authority, it is al shabab which decides who's allowed in. the group monitors throughout every process of the aid relief operation.

islamic relief is one of the international agencies who've been able to bring supplies into the worst-affected zone. with their own staff on the ground, they say they are confident none of their supplies are being diverted or taxed. i joined them on their first day as they distributed rations to 5,000 families in baidoa. >> we really need sometimes to put politics aside, and we are in a humanitarian emergency. when i come to baidoa and i see people really in need of aid and i can't access funds or support because someone is fearing al shabab, i think it's not humanistic and it's not very noble.

>> reporter: a makeshift clinic is run by two volunteer doctors and their medical students. they say they are seeing an alarming rise in cholera-like cases. irgigo kusow is in emergency treatment on the floor. months of poor nutrition have left her body weak against disease. >> the medical students really afraid of iv for rehydration. >> reporter: in southern somalia, where so many are barely surviving, the aid is trickling in, but its only trickling in with the cooperation of al shabab. aid organizations recognize its impossible for them to operate without the groups help. since the famine was declared, the islamists have repeatedly been accused of hampering the relief effort. but, during the short period i was there, i did not see any malpractice or corruption. in fact, many of the aid workers told me they actually appreciated al shabab's assistance.

these people need a whole-scale rescue effort. while the argument over access goes on, their long wait will continue. >> brown: now, new information about a major cyber attack on u.s. and international systems. margaret warner has the story. >> warner: for at least five years, a high-level hacking campaign infiltrated the computer systems of more than 70 governments, corporations and public and private organizations in 14 countries. so says the internet security firm mcafee, which uncovered the massive campaign and dubbed it "operation shady rat." a summary released by mcafee yesterday identified the perpetrator only as "one specific state actor." the story became public tuesday through reporting in "vanity fair" by michael joseph gross. he joins us now. michael gross, thank you for being with us.

this operation sounds breath talking in its scope. -- breathtaking in its scope. give us a sense, flush that out, who were they going after, who was targeted? >> this is an unprecedented campaign of cyberespionage, demonstrates with absolute clarity now that there are just two kinds of organizations. those that have been compromised and those that haven't as dimitri, elparavich the guy who discovered this campaign has often said. what happened is they went into more than 70 organizations, everything from the international olympic committee to giant corporations, to tiny nonprofits, in 30 different organizational categories in 14 countries. they took out government secrets, design schematics, legal contracts, negotiation plans for business deals, every kind of sensitive information you can think of. in many cases these

organizations were compromised for at least a year. in some cases more than two years. and there's a really interesting pattern to the evolution of the attacks that suggest where they may have come from. >> warner: and that is? >> that is china. there are, in the run-up to the olympic games they started the 2008 olympic games. these attackers started turning their attention to nato limb pick committees. >> warner: this is in beijing, of course, the games, just to remind people. >> that's right. the list of victims includes 49 in the united states and many in almost every southeast ashean country. almost every organization is known to be of interest to china. but there was not a single victim in the people's republic itself. >> warner: so what you're describing is not just

cyberespionage but also cybertheft. >> that's right. >> warner: valuable information economically and politically. >> that's right. this is-- you know, it's interesting to be having this conversation today on the day the dow takes this massive drop. because what we're talking about when we talk about the theft of this information is the theft of our economic competitiveness. this is the theft of the potential that we have to get back up to speed. we don't knows what's happening to this information yet. and we won't know for a few years whether it's being used to engineer new products. but by the time we figure that out f that is, indeed the case, it will be too late. >> warner: and just briefly this is quite different then the very well publicized hacking that came out a few months ago into, whether it was the senate web site, cia web site, the pbs web site, this is a different quality.

>> -- >> yes, again the guy without discovered these attacks told me it's been very frustrated for him all spring to be watching the news of this anonymous and low sect activity. because so much of it is just nuisance. they're just defacing web sites. that's the sideshow. that's the sideshow and this is the main event. >> warner: so how did mcafee the security company get on to it. and what did they do with it once they realized what was going on? >> in 2009 one of their clients, a defense contractor, noticed some unusual traffic. and when mcafee looked at it they realized that they were being attacked by a never-before seen species of malicious software. when the victims would click on a link to a web page, mallwear would be loaded on to their compute-- mall wail would be loaded on to their computer which would give the attacker privilege, or allow the attackers to open

a back door, take privileges, get access to information in the system and begin pulling it out. mcafee closed down the link to that server, the server to which the stolen information was going immediately. so its clients were blocked from connecting there. but you know, for those who have chosen not to accept information about these attacks, which several of the victims actually seem to be quite determined not to confront this problem, the attacks are ongoing. and the theft continues. >> warner: so in other words, some, though mcafee notified all 72 organizations, some didn't even take their offer of help and this server, wherever it is, is still up and running? >> that's right. mcafee is working with government agencies to try to get it shut down. but there are a lot of

jurisdictional and procedural issues that make that a complicated and lengthy process. in at least two cases i found that even after mcafee had alerted the victims, when i called the press representatives for those victims, they had not heard anything about this. and as i say, in at least some of these cases the attacks are ongoing and folks have refused to take help in addressing the problem. >> warner: and just very briefly, has the u.s. government said anything in response? >> i believe jay carney z the white house spokesman did make some comments about this in a press conference, i believe it was today but that's just hearsay from a hacker convention that i'm attending here in vegas. i do know that mcav-- mcafee has been briefing white house, the congress, other executive agencies and i

received a statement from senator feinstein that it sent a select committee on intelligence expressing her extreme concern after reading this report. >> warner: well, more to come, michael joseph gross, thank you so much. and good reporting. >> thank you. >> woodruff: and to another in our film project collaboration with "the economist" magazine to take us places we don't ordinarily go. tonight, the filmmakers rebecca haimowitz and vaishali sinha come from the united states and india. together, they weave a very human story that crosses international boundaries. it's about an american couple, lisa and brian switzer, who travel halfway around the world to fulfill their dream of having a baby. a reproductive outsourcing company matches them with an indian surrogate mother named aasia. her last name isn't given to protect her identity.

here is an excerpt now from "made in india." >> you know, a woman a lot of times defines herself by her ability to have children. i just can't imagine being without kids. i wanted to be a mother since i was about 25 years old, but here i am, turning 40. i've been trying for seven years to get pregnant, and it hasn't been an easy task by anybody's stretch of the imagination. we don't really have the luxury of waiting or the luxury of seeing if there's other alternatives. this is something that's... this is our one and final shot. when i went to the gynecologist, or oncologist, he did a biopsy on my uterus. i was really shocked. they were just, like, "we want to do a hysterectomy," you know? cancerous." we... "right now, you're pre-

cancerous." and my doctor is, like, "i know you want this, and i'll leave your ovaries there, but your uterus has got to come out." that was just... that was... >> that was a hard day, that day. >> that was, that was. >> they told her they wanted to take the uterus out because that was... that was insane. "you will never carry a child." so that's when we starting looking at surrogacies. >> i don't have a surrogate. i don't, you know. i cant afford a surrogate. they want $25,000 to $35,000 just for the mother. my best friend jennifer sent me an article about couples going to india to do i.v.f. and surrogacy. i found planet hospital. >> i'm the cofounder of planet hospital, and what we do is we help people get affordable health care from around the world, including surrogacies. yeah, yeah, sure. okay. bye. bye. it was what happened anyways, with or without us, as we want to put the same quality of protection and comfort and

safety in surrogacy as i've been doing on the other stuff we do medically. ( beep ) yes. hi, it's rudy. hello, rudy. we have all the answers from the whole process, from, you know, which surrogate clinician they go to all the way to, you know, what's our legal problems and how do i bring my babies back? if the surrogate changes their mind and wants to keep the baby, what's the legal recourse? is this because they're baby- buying or is it legitimately surrogacy? >> $500 advertising for the surrogate. the preparation of the surrogate and embryo transfer stage is $2,500 because they have to do all her drugs to get her caught up with me and ready to receive a baby. and then the i.v.f. is $500. the surrogate actually gets $7,000 for her carrying our baby. this woman is carrying a life that i cant carry.

she's giving me the family i cant create. you know, i'll never, never be able to thank her enough. >> ( translated ): what should i say about myself? i used to clean people's homes before. i'm not educated. i don't know how to read or write. so this is my life. i've had three kids. all my children were born normally. i've never done anything of this sort. my sister-in-law, sanno, had told me about it, but i didn't believe her, that this can happen with medication. now... how should i say it? a child without a man! ( laughs )

how? that day was kind of good. suddenly, i found out that i was pregnant. i was happy. >> no freaking way. >> what? >> congratulations. ( laughter and applause ) we got a baby, we got a baby! >> ( laughs ) i told you. >> ( cries ) >> with low cost and high quality, medical tourism is a trend that's likely to grow. >> the lay press has been

interviewing couples with babies from here, putting out photographs of these couples with babies in american newspapers and magazines. so this has sort of really given the whole thing a big boost. we have new companies, like, you know, every month we have a new inquiry, a new medical tourism company. suddenly, we are seeing a whole lot of patient reference coming from north america coming down to india. >> there are many, many, you know, surrogate women. we don't know what is happening to them and their particular diet and their particular regime-- when to go, what to do- - you know? suppose if she has a miscarriage. what will happen? and we have a lot of questions. the focus for sama is the larger framework. you know, what is the rule? by the commissioning parents or the intended couple, what do we call them? what is the rule of the state? our demand was, they should understand the fact that a surrogate mother has a bodily integrity and an autonomy.

>> that's where i show my coworkers the web site. they got this section here called "discuss, what do you think?" and i thought, "oh, well, let's see what everybody else thinks." and the first two started out very nice. you know, "what's the legal status," you know? "is there any immigration issues?" things of that nature. and then it got ugly. people started saying things like the use of surrogates is a disgusting immoral practice to begin with, but then to farm it out like cheap labor to women in india, we should be disgusted and ashamed. and then you get the, "oh, hey, it's all about saving money," you know? "what about adopting?" there were more people telling us, "you should have adopted, you should have adopted." well, that's placing the entire orphan issue on the shoulders of infertile couples. by their argument, anybody who has ever proactively tried to get pregnant together and succeeded and had their own children has robbed an orphan of a lovely home, plain and simple.

so don't place that burden on the infertile couple out there. and what kills me is everybody screaming about the surrogacy issue. "oh, its a... its a baby mill. you know, its a puppy farm." and its not. i felt i had to defend lisa and i as well as every other non- indian that's going to india to have this done. so here's what i wrote to all these people that were just spewing this hateful talk: "the surrogates are well compensated in line with their local economy. i have seen poverty unlike anything i could've imagined, and knowing what this process is going to do for the surrogate and her family in the long run makes me realize that this is a very good thing for all parties involved." >> ( translated ): the contract had details about payment and the child would go to them, that you should have no right to it, and that later you shouldn't change your mind like some women do. because their hearts melt as they think "no, i will not give the child."

that shouldn't happen, so i said, "no, that wont happen." they just said that this is how much the payment will be. they told me $2,000. because for my children. a son can earn anywhere. but i want to save this for my daughter. >> woodruff: aasia gave birth to twin girls. after navigating some legal hurdles, brian and lisa brought them home to texas. "made in india" is being screened at film festivals here in the u.s. and abroad. you can find a link on our web site for a list of dates and cities. tomorrow, special correspondent fred de sam lazaro explores the ethical questions surrounding international surrogacy. >> brown: "blacks and latinos are not fully sharing in the promise of american freedom"-- that from a speech this morning

by new york city major michael bloomberg, who announced a $127 million, three-year plan to coordinate city agencies and efforts with a goal of reducing disparities between young black and latino men and the rest of the population. among much else, the city would create job recruitment centers in public housing projects, place new probation centers in high-risk areas to enable young men to stay closer to home, and, for the first time, the department of education would make the success of blacks and latinos a part of school progress reports. the mayor himself will contribute $30 million through his foundation, an amount being matched by financier george soros. the rest comes from the city. mayor michael bloomberg joins us now from city hall in new york. you welcome to you. >> huai very much, thanks for having me. >> brown: what exactly first is the problem as you see it and how serious is it? >> well, for a long time people have said there's nothing you can do about it. but the blacks and latinos

score terribly in school testing compared to whites and asians. if you look at our jails it's predominantly minorities. if you look at where crime takes place it's in minority neighborhoods. if you look at who the victims and the perpetrators are, it's virtually all minorities. this is something that has gone on for a long time. i assume it's prevalent elsewhere, but certainly true in new york city. and for many, many years people said there was just nothing you can do about it. now what we have done in the last ten years is we've cut the testing gap in schools for black and latino kids versus white nation kids in half. but they still are way behind. we have tried to diversify our police department so that it really does measure-- mirror the communities ethnicity. and they've brought crime down dramatically. we have the lowest crime rate we've ever had in the history of the city. and that's particularly important to black and lad

ino kids and their families and their neighborhoods because that is where the crime is. so they benefit from that. and we've done a number of these kinds of things trying to attract the kind of jobs that are available to people who maybe don't have a formal education, have dropped out of school, or don't have great command of the english language, or have blemish on their resume which would keep them from getting a job at a more traditional firm where they do an extensive background check. and so we've tried to attract industries that can use the people here who are unemployed. but nevertheless, there's this enormous cohort of black and latino males age let's say 16 to 25 that don't have jobs, don't have any prospects, don't know how to find jobs, don't know that-- what their skill sets are. don't know how to behave in the workplace where they have to work collaboratively and collectively. >> brown: let me if i could ask you for a specific example. because you are saying all

these things you've been doing have not been enough. so i listed some of the examples. one key that you talk about in the jobs area is linking employers with young men who are or have been in prison. now how specifically, what will change? how will you go about convincing employers that these people should be employed? >> well, i think employers, if you can show them that these kids have paid their debt to society and have gotten some training afterwards so they know how to fit into the workplace, there are jobs where they can participate, have the dignity of being self-sufficient, contribute to their employer, and get along with everybody else. there are some jobs where if you have a criminal record you're just not going to get-- they had some public safety things where it just doesn't fit. but there will be jobs if we can get these kids, get

their families together, even if their fathers don't live with their mothers or have never been married or maybe they're in jail, get the fathers engaged. a lot of statistics show that if the father is engaged it gives the kids some understanding that he's heading down the wrong path. and then assign mentors to them on one on one basis so that there is somebody who has been successful, has a job, has a family, fits into society. and that they can go to. you know, a lot of these kids, it isn't that they're bad kids, it's that once they made a mistake it's very difficult to recover from that. but we have an obligation to them, if not for compassionate reasons, just for self-ish reasons, three quarters of all kids in new york city that go to jail serve a period, and come out, go right back to jail. three quarters of them go back within a very short period of time. we just got to break that cycle. >> brown: but as you say,

the aspiration, the goal has been there for a long time. you yourself have tried many things that don't seem to-- don't seem to have worked. what has been, when you look back, when your staff and everybody was looking at all this, what have been the chief stumbling blocks and how do you get past them at this time? >> i say number one it's not fair to say we haven't made progress because there are a lot of kids we have helped. they've gotten through the most difficult periods in their lives. there are constructive members of society. for all i know one is going to be the next mayor of new york city. for all i know one will win a nobel prize. we have made a difference. we haven't made enough difference and we haven't reached out to as many kids as we think we could. there are some simple things you can do. for example if you want to apply for a job they say let me see some id. >> a lot of our kids don't have an i.d.. they just don't have any document that shows who they are. >> and so if you apply for a federal or a state or city

program or if you try to apply for a job, you just don't have the documentation. you and i think everybody has an i.d.. of course they would have an i.d. a social security card, a driver's license, whatever. these kids don't have that. so just getting them through that kind of stuff would make a difference. >> and can i ask you briefly, you obviously thought this was important enough to put a lot of your own money in through your foundation. does it not --. >> yes. >> does it not happen otherwise, does it not get done otherwise? >> well, look, the reality of today's economy is nobody wants to pay more taxes. we can't afford the services that we have gotten accustomed to. we are not likely to add more services in the immediate future. and so we want to do something now. we've got to do a public private partnership. the other thing is the private money is different than public money. it's much smaller. for example, our school system costs us $22 billion a year to run. so you can't make a meaningful difference in our public school system with

the amount of money we can raise in the private sector. on the other hand, with private money you can try new things that you can't do with public money. public money you really have to be able to be reasonably assured that the programs, the things you do with it are going to work. you can't take a gamble on something that's off the wall that may have enormous payback but has enormous risks with it. with private money you can do a demonstration project with exactly that. find out what works and then if it works, put it back into the system and let the public pay for it. >> mayor, before i let you go, i do have to ask you about the main story of the day, the dramatic drop in the stock market. briefly if you could, what do you see happening? >> and how concerned are you about the markets and the economy? >> i think we should be very concerned. i've been saying all along during this fiasco trying to come to an agreement on the deficit ceiling, the public has been watching the

process and has come to believe that our government is not working. it is not one end of pennsylvania avenue or the other, it's not one side of the aisle or the other. they have watched a health-care bill and financial rig bill and this stimulus bills be done in the public eye for the first time. and it's not a pretty picture. as the old joke you never want to see how the law and sausage is made. for the first time the public has seen how the law is made and it didn't leave them with way warm and fuzzy feeling. they have a feeling that government is just piling regulations on that they don't understand. government is legislating things for their own self-interest that don't make any sense and they're starting to really worry that america is losing its competitive edge. jobs are going overseas because we can't bring workers here. the next best thing that is being invented is being invented overseas, not here. and they're starting to say wait a minute, i just watched government once again be so dysfunctional. the fact that they came up with a deal, whatever that means, for changing, for increasing the debt ceiling,

everybody sees they didn't do anything to balance the budget. they didn't do anything to any of our long-term problems. they kicked the can down the road with probably particular if icious savings way down the road and no new revenues. that's not the way to help this country get its act together. >> all right, new york city mayor michael bloomberg. thank you very much. >> you're welcome. >> woodruff: again, the major developments of the day. stocks plunged in a major global sell-off, triggering fears of another recession. the dow jones industrial average lost more than 500 points, its worst drop since the 2008 financial crisis. congressional leaders struck a deal to bring an end to the partial shutdown of the federal aviation administration. and activists in syria reported security forces have now killed 100 people in the city of hama

in the last 24 hours in a continuing crackdown. on our web site, more on the markets and birthdays past and present. hari sreenivasan explains. >> reporter: paul solman weighs in on today's wall street sell- off on our "making sense" page. president obama turns 50 today; we look at where past presidents were when they reached that milestone. find our slideshow on the rundown blog. plus, researchers have released new findings on mars, including more evidence that water might exist on the planet today. that report is our science page. all that and more is on our web site, newshour.pbs.org. judy? >> woodruff: and that's the newshour for tonight. i'm judy woodruff. >> brown: and i'm jeffrey brown. we'll see you online and again here tomorrow evening with mark shields and michael gerson, among others. thank you and good night. major funding for the pbs newshour has been provided by:

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