Om Malik brings his typical insight to the telephone/internet dragnet:

Imagine you’re a European government wanting to move your IT systems into the cloud. For some, nationalism and protectionism already come into play at this point – witness the French (of course) and the two national clouds that they have under development.

Now imagine you’re a U.S. firm trying to drum up business in that context. You can say you have an EU data center and you’re even willing to set up a mini-cloud in the country, just to put everyone’s mind at rest. You can say it and you can mean it, but can you really be surprised when you get laughed at because everyone now sees U.S. internet companies as being in league with the NSA? Even if you’re Amazon, which isn’t part of PRISM, you have a problem.

Go read the whole story.

This could be the single most damaging thing you could inflict on one of the only healthy export sectors of our economy. And it hits right as we come out of a major economic downturn.

That’s not even considering the damage to our credibility as we fight to improve freedom of speech and privacy online in authoritarian regimes worldwide.

And we did it all to ourselves.