Odd Lots · Monday, July 27, 2026
Branko Milanovic discusses the 'elephant chart,' which illustrates the stagnation of Western middle-class incomes from 1980 to 2016, while the global top 1% and the emerging middle class in Asia saw significant gains. He suggests that governments faced a choice: either implement policies to tax the rich and redistribute wealth domestically, or blame China for economic woes. Milanovic notes that the latter approach gained political traction, particularly with figures like Trump.
“The elephant chart with the show. Really the bottom line is okay, middle classes, so the West have not been doing well. Growth three to one percent random per capita not very well. The top of the Western distributions are doing very well, you know under Clinton especially, you know, three percent and more. And then of course China is doing very well.”
“So you are sitting there, you are a government of the United States. Let's say you have two possible options. You have, Okay, we go for policies that would actually tax the rich, that would transfer the money, that would do I don't know, serious start of risk, killing of labor, public education because I come from public education, public education rather than private, get rid of all these fancy schools that are being bankrolled by billionaires and do a serious effort. Or you say, oh, look, China is like screwing us, so let's go after China.”
“And I think that Trump twenty sixteen for me is the watershed here because many of the policies that Trump then imposed and regarding China that continued under Biden. They were done in a more maybe intelligent way, but basically they continued, and I think that was the change.”