If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place.
I'm not convinced, however, that there's a reassuring amount of daylight between these two statements.
I should add that I very much agree with what you said about Google being in a position to make a much stronger stand for privacy rights in this country. I equally think that this is a pointless little shitstorm that detracts from the larger issue by making privacy advocacy look like petty language lawyering.
Also, if it seems it might have been taken out of context, people should rail on what he said anyway, so he has a chance to defend himself. If he doesn't defend himself, there's a pretty good chance he meant it.
It seems like Google might be coming out of the closet as a regular megacorp, just like Apple did a few years ago when it started using DRM, and again a couple of years ago when it made a deal with AT&T, and finally put away any question of them being an exception to the rule when it came out with its app store.
Are you referring to the DRM it also dropped at a later stage after they managed to convince the content suppliers ;)
I'm not arguing for them sacrificing their customer base. I'm arguing for us not letting companies like Apple and Google get away with looking like the good guys when they're just the profit-driven guys like everyone else. Google's "Don't Be Evil" motto makes me sick, just like the squeaky-clean reputation Steve Jobs once had.
Please keep in mind you're commenting about a snippet of a televised interview. For all you know Eric Schmidt agrees with everything you wrote above. (He may have even said something along these lines and it was edited out.) He certainly did not say or even imply "the innocent have nothing to hide."