When Mr. Burns is informed that the Nuclear Power Plant has run out of room to store waste plutonium, Smithers hides some of the radioactive matter in Homer's gym bag. Shortly afterwards, Homer goes to the train station and forgets the bag. The police see the bag as a threat and decide to detonate it, causing a nuclear explosion in the train station. The incident sparks fear of terrorism, and the town votes to hire British security consultant Nigel Bakerbutcher to install surveillance cameras all around Springfield. Soon the entire town is being watched, but when Chief Wiggum and the other police officers get tired of watching the surveillance screens, they recruit some of the townspeople — including Marge and Ned Flanders — to keep watch. Marge is not comfortable watching the activities of her fellow townspeople, but Ned discovers he enjoys being Springfield's "conscience" and proceeds to nag everyone through loudspeakers on the cameras.
Lisa is invited to join the school debate team, but soon discovers that she faces prejudice from the brunette supremacist judges because she has blonde hair. This prejudice follows her during the town meeting when Cletus mocks her concerns over the freedom infringement. Marge's attempt to comfort her fails, and Lisa hears Bart make comments against blondes even though Bart himself is blonde. When she calls him out for being prejudice against blondes, Bart defends himself by pointing out how the dumb blonde-stereotype mostly just applies to women and girls, while men and boys with blonde hair are expected to be evil and conniving rather than unintelligent. In a moment of kindness, Bart admits that he knows Lisa is the only exception to the blonde stereotype and this was his way of encouraging her to continue her fight against it. Dyeing her hair brown, a newly determined Lisa deliberately presents a weak argument at the next debate meeting in favor of school uniforms and conformity. Nevertheless, she receives praise from the judges and earns the wrath of her rival, Megan, who realizes that because Lisa is now a brunette, she has levelled the playing field. Lisa is horrified when she learns the judges agreed with her simply because of her darker hair and not the strength of her debate skill. She points out their bias toward brunettes, prompting the only female judge on the panel to proudly admit her belief in the blonde stereotype. Lisa urges the audience not to blindly follow stereotypes as they all have exceptions. She uses herself being an intelligent blonde and nearby Comic Book Guy being obese, but very miserly as prime examples. However, one of her claims - that not all old people are bad drivers - is immediately undermined when Grampa Simpson crashes his car through the wall of the school gymnasium where the debate is being held. In spite of the setback, many are encouraged by Lisa to look past the stereotypes.
Meanwhile, the townspeople become frustrated by Ned's constant nagging. Bart discovers that the family's backyard contains a blind spot that none of the cameras can see, and he and Homer soon begin charging people to do whatever they want there. When Ned scolds Homer for allowing so many immoral activities to go on, Homer retorts that the situation is Ned's fault as he has abused his power and literally played God over the town. Ned apologizes to the town for his interference, and he and Homer proceed to destroy all the cameras. The final scene reveals that Bakerbutcher has been using the footage to put together a British reality television series called The American Oafs, which Queen Elizabeth II enjoys watching because Ralph Wiggum reminds her of her son, Prince Charles.