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As usual, Christopher Caldwell gets it right:
Not even Sarah Palin disputes the right of Muslims to build houses of worship where they wish. Few mosque opponents argue seriously that this one can be blocked. The argument of Ms Palin and others is instead that it is insensitive to build a mega-mosque next to the spot where 2,700 people were killed in Islam's name. This distinction – between what is constitutional and what is appropriate – is an important one.( Complete article here, because the Financial Times requires registration )