Conservatives should be applauding Obama from the highest rooftops for his position on the mosque.

1. He stated that policy should respect the rule of law.

2. He stated that he would not express an opinion on the actions of the relevant private parties.

Isn’t that exactly what conservatives claim to want out of the President in other arenas?

SHANGHAI — After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday. …

Experts say unseating Japan — and in recent years passing Germany, France and Great Britain — underscores China’s growing clout and bolsters forecasts that China will pass the United States as the world’s biggest economy as early as 2030.

I am skeptical that China will overtake the U.S. (especially if we focus on per capita GDP), but I do not discount the possibility entirely.

On the one hand, China’s growth rate will slow over time because the best opportunities for growth are the ones being exploited first.

In addition, China is hardly a bastion of capitalism. The government imposes a broad range of economic decisions on the private sector (e.g., green energy), and these “industrial policies” will prove costly down the line.

On the other hand, U.S. economic policy has shifted markedly away from economic growth and toward redistribution. So whatever mistakes Chinese policy will make, we are likely to make many of our own.

At least a dozen major drug and device makers are under investigation by federal prosecutors and securities regulators in a broadening bribery inquiry into whether the companies made illegal payments to doctors and health officials in foreign countries.

In previous investigations, federal officials have charged that some companies made these kinds of payments to encourage doctors abroad to order or prescribe their products. In the United States, companies routinely hire doctors as consultants to market drugs and devices to their colleagues and other health professionals at medical conventions and small gatherings. Such consulting arrangements are legal in the United States as long as the companies do not pay doctors directly to write prescriptions for their products.

Why are these payments an issue for U.S. policy? If foreign governments believe the payments are harmful, let them prosecute.

And the payments may in fact be beneficial. By encouraging utilization of new medicines and devices, drug and device makers can expand the size of their markets, which implies lower prices due to economies of scale.

Plus, the ability to generate a larger market enhances the incentive to develop drugs and devices for rare diseases and conditions. Drug and device companies will ignore these if they cannot make a sufficient return on the necessary research and development.

At aolnews.com.

One in 12 babies born in the U.S. in 2008 were offspring of illegal immigrants, according to a new study, an estimate that could inflame the debate over birthright citizenship.

Setting aside the constitutional issues, what would be the effects of eliminating birthright citizenship?

Immigration opponents presumably think that elimination will reduce the incentive to immigrate, thereby shrinking illegal immigration.

These advocates may be right, but it’s hard to know whether the reduction in illegal immigration would be minimal or substantial.

Assuming much illegal immigration continues even without birthright citizenship, the effect of elimination is to drive illegal immigrants and their children further into the underground economy, reducing the scope for assimilation.

That strikes me a highly undesirable. The history of U.S. immigration shows that the vast majority of immigrants, legal or not, assimilate within a generation or two.  Thus, fears that immigrants will undermine U.S. culture, language, customs, or whatever are unfounded, assuming immigrants have both the opportunity and incentive to assimilate.

So, I leave the constitutional issue to the lawyers. But as a matter of public policy, I support birthright citizenship.

Pentagon officials say they are sifting through 15,000 classified Afghanistan war documents for sensitive material that could harm troops or civilians–documents they believe the on-line site WikiLeaks has obtained and might disclose.

The records at issue contain material that is “potentially more explosive, more sensitive” than the information in the 77,000 Afghanistan field reports and assessments WikiLeaks put on-line last month in an effort to shed light on the U.S. military’s war in Afghanistan, Pentagon spokesman Geoff Morrell said.

What do the words “potentially more explosive, more senstive” mean in the second paragraph above? My guess: “embarrassing to the administration, and/or the military, and/or the current leadership in Afghanistan.”

Stay tuned.

Federal Reserve officials moved to prevent the Fed’s huge balance sheet from shrinking, an attempt to spur the U.S. economy’s recovery and avoid deflation.

At the end of a policy-meeting Tuesday, Fed officials said they would reinvest the proceeds from expiring mortgage-backed securities into longer-term U.S. Treasurys.

It is important to note that the Fed is making two decisions here:

1. To get out of the activity of buying securities other than treasury debt;

2. To continue with an expansionary monetary policy.

I applaud the first decision. I thought it was a mistake for the Fed to buy MBS because that sets a precedent for future purchases of other depressed securities, and if that precedent takes hold, it augurs all kinds of uncertainty for markets as they try to guess which sector the Fed will start or stop supporting.  So, I am glad they are starting to get out of this business, although I am afraid they have already opened Pandora’s box.

I am not sure what I think about the second decision. Without question, the economy still appears weak.  Yet I am somewhat skeptical that continued monetary stimulus is what the economy needs; I would suggest big cuts in marginal tax rates, starting with making the Bush tax cuts permanent.  In addition, the monetary expansion may prove hard to undo at some point down the line, even though that day seems far in the future right now.

All in all, the Fed’s position seems reasonable.  But I do not think the Fed is going to solve the economy’s problems.

WASHINGTON — Defense Secretary Robert M. Gates said on Monday that he would close a major military command, restrict the use of outside contractors and reduce the number of generals and admirals across the armed forces to trim back on unaffordable defense spending.

Mr. Gates said he had ordered a 10 percent reduction in spending on contractors who provide support services to the military, including intelligence-related contracts, and placed a freeze on the number of workers in the office of the secretary of defense, other Pentagon supervisory agencies and the headquarters of the military’s combat commands.

Mr. Gates, who has been promising to cut the Pentagon’s day-to-day budget in order to meet the continuing costs of the wars in Iraq and Afghanistan in the face of tight fiscal constraints and mounting domestic spending, placed a cap on the number of generals, admirals and senior civilian positions across the Pentagon and the military. He said the Defense Department should try to cut at least 50 general and admiral posts and 150 senior civilian positions over the next two years.

All these cuts may be perfectly sensible, but they probably will not happen and add up to peanuts compared to the occupations in Iraq and Afghanistan.  So, this is spin, not serious budget cutting.

JHABUA, India — Inside the drab district hospital, where dogs patter down the corridors, sniffing for food, Ratan Bhuria’s children are curled together in the malnutrition ward, hovering at the edge of starvation. His daughter, Nani, is 4 and weighs 20 pounds. His son, Jogdiya, is 2 and weighs only eight.

Landless and illiterate, drowned by debt, Mr. Bhuria and his ailing children have staggered into the hospital ward after falling through India’s social safety net. They should receive subsidized government food and cooking fuel. They do not. The older children should be enrolled in school and receiving a free daily lunch. They are not. And they are hardly alone: India’s eight poorest states have more people in poverty — an estimated 421 million — than Africa’s 26 poorest nations, one study recently reported.

For the governing Indian National Congress Party, which has staked its political fortunes on appealing to the poor, this persistent inability to make government work for people like Mr. Bhuria has set off an ideological debate over a question that once would have been unthinkable in India: Should the country begin to unshackle the poor from the inefficient, decades-old government food distribution system and try something radical, like simply giving out food coupons, or cash?

Yes.

That is a separate issue from whether, or how much, anti-poverty food spending the Indian government should undertake. Whatever the amount, cash/coupons are more efficient than a government bureaucracy. The problem to be addressed is that the poor are poor, not that markets cannot supply food to those with the ability to pay.

Of course:

BAGHDAD — A car bomb detonated a fuel tank in Iraq’s second-largest city, Basra, on Saturday, spreading fire through a crowded market, Interior Ministry officials said, in the worst attack of the day that marked five months since Iraqis voted for a new government that has yet to be created.

In all, at least 30 people were killed in attacks on Saturday.

For weeks, American and Iraqi officials have said they expect violence to grow as the American military reduces the number of its troops to 50,000 from about 64,000 by the end of the month. The withdrawal comes amid anxiety in the streets over the political paralysis, which could last months more, and growing fears that insurgents are trying to reorganize in regions like Baghdad and Falluja, where they long had a presence.

The only thing surprising about this story is that anyone is surprised. It should have been obvious that as the U.S. presence wanes, all the old tensions and battles will re-ignite until one group or another has established itself as the new, authoritarian regime.