Drucker: Paranoia over phone spying? Investors react with yawns

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My last blog discussed the American government’s seizure of journalists’ phone records, which was an indefensible assault on press freedom. This week I’m on the other side, in the uproar over revelations that the National Security Agency is collecting Americans’ communication data.

In 2007, the PRISM surveillance program was established under the Bush administration, for allowing the American government to access information about the destination and duration of phone calls. The program, expanded under the Obama regime, now affects email, video and voice chat, photos, voice-over-IP, file transfers and social networking details. The president, reacting to the public outcry, is emphasizing the balance between privacy protection and vigilance against terrorist plots.

It’s much ado about nothing. Leading senators from both parties, like Democrat Dianne Feinstein and Republican Saxby Chambers, staunchly defend the program. Senate majority leader Harry Reid suggests that “everyone should calm down and understand this isn’t anything that’s brand new”. The actual content of communications is not particularly compromised, and a second warrant is still required for listening directly to calls or reading emails.

Besides, imagine combing through trillions of pieces of data. I am reminded of a tourist trip I made to the Soviet Union in the 1980’s, to the dismay of American colleagues, who warned that my hotel rooms would be bugged. I soon realized that if any bugging equipment had ever existed, it had long since corroded!

Critics are missing the elephant in the room. We can barely translate the content of the communications. What American spy agencies urgently need is Arabic speakers, as well those proficient in Pashto, Farsi, Dari, Tajik, Azgari, Uzbek, Turkmen and Berber. The agencies refuse to discuss their poor competencies in language skills, only acknowledging that they have trebled their Arabic linguists from pathetically low levels since 9/11.

Unlike the public, Wall Street has reacted to PRISM with a big yawn. The entire breed of too-big-to-fail communications giants appear implicated. Not only have phone companies Verizon, ATT and Sprint Nextel been mined, but also servers of nine major internet companies, including Google, Apple, Yahoo and Facebook.

Do investors care? Since the story broke, the stocks have performed very nicely, thank you.

Vanessa Drucker is the American editor of Fund Strategy magazine