What I'm reading: Ukraine is not really about Ukraine

By Fareed Zakaria

“The reality is that neither the EU nor the US really cares if Ukraine becomes more nationalistic or more pro-Russian,” writes Agata Pyzik in the New Statesman. “What high officials care about, as the recent scandal with the U.S. envoy Victoria Nuland and her open contempt for Europe shows, is geopolitics and relations with Russia.”

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“In The Dollar Trap, Cornell University economist Eswar Prasad argues that for all the worries about U.S. policies and debt, and the many efforts to build up an alternative, the dollar's linchpin role is only strengthening,” writes William Pesek for Bloomberg. “What struck me most, though, is that China still can't see that it's the dupe in this giant pyramid scheme.”

“China's $3.8 trillion of currency reserves are the largest stockpile ever amassed. Economists have long seen that money as a strength – the ultimate rainy-day fund should China's shadow-banking system blow up. Trouble is, the value of those holdings depends on China's $1.3 trillion of U.S. Treasuries. If they plunge in value, all hell breaks loose and officials from Beijing to Brasilia will scramble to exit the American bird cage.”

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“Today, Turkey is a nation of rapid economic growth, declining inequality and heightened political participation,” argues Mustafa Akyol in the New York Times. “One of the world’s top tourist destinations, it has invested heavily in infrastructure and public transportation. Turks do not need more high rises or shopping malls; we already have plenty of those. What we urgently need to build is a culture of dialogue, empathy and consensus – and Tunisia might be a good place to look for guidance.”

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“It is not enough to identify policies that would reduce inequality. To be effective, they must also raise the incomes of the middle class and the poor,” writes Larry Summers in the Washington Post. “Tax reform would play a major role here. Beyond its adverse effects on economic efficiency, today’s tax code allows a far larger share of the income of the rich to escape taxation than the poor or middle class. For example, last year’s stock market growth represented an increase in wealth of about $6 trillion, with the lion’s share going to the very wealthy. It is unlikely that the government will collect as much as 10 percent of this given the capital gains exemption, the ability to defer unrealized capital gains and the absence of any tax on gains on assets passed on at death.”

“Meanwhile, the ratio of corporate tax collections to the market value of U.S. corporations is near a record low, thanks to various loopholes. And the estate tax can be substantially avoided by those prepared to plan and seek sophisticated advice. Closing loopholes that only the wealthy can enjoy would enable targeted tax measures such as the earned-income tax credit to raise the incomes of the poor and middle class more than dollar for dollar by incentivizing working and saving.”