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The annual World Economic Forum meeting, known as Davos, has always had its share of optics. Imagine a bunch of people landing on a private jet, clinking cocktail glasses with other wealthy people, and trying to make each other even richer while eating steaks and participating in panel discussions about alleviating poverty and combating climate change (among other noble causes).

But Davos 2026 has morphed into a kind of emergency session of the world’s elites to counter two simultaneous, ultimately related threats. There’s the elephant in the room — President Donald Trump and his trade warmongers, who are scheduled to attend Wednesday’s summit — and there’s another, far more complex force known as the K-shaped economy that threatens to destabilize the world order.

The term, popularized by economist Peter Atwater, refers to the widening rift between the “haves” and “have-nots” starting in 2020. The pandemic hit everyone at once, and the recovery from its shock has followed two divergent trajectories, with the rich getting richer and the poor getting poorer.

Almost six years later, the gap between the top and bottom K players is still wide. The stock market, although volatile, is trading near all-time highs. Luxury hotel bookings remain strong even as fewer Americans take vacations. What looks like a housing affordability crisis at one end of the economy feels like a windfall at the other end, as the scarcity has increased home values.

If the Davos crowd seemed numb in front The pandemic, the affordability crisis that fueled Trump’s re-election, have only sharpened the contrast between those in Davos and everyone else.

“Those at the bottom are fully aware of the wealth that exists above them,” said Atwater, an adjunct professor of economics at the College of William and Mary. “But I think one of the effects of COVID-19 is that it blinded the upper management…Apart from the delivery guy showing up at the door, the interaction between upper management and lower management has really diminished, if not evaporated.”

Certainly, the Davos crowd knew in their heads that they had a “private jet to discuss climate change” problem. Larry Fink, BlackRock’s CEO and the summit’s de facto “mayor,” diagnosed the core problem in his opening remarks Monday.

“Many of the people most affected by what we’re talking about here will never come to this meeting,” Fink said in his opening remarks Monday. “That’s the central tension of this forum: Davos is a gathering of elites trying to shape a world that belongs to everyone.”

In classic Davos style, Fink states the obvious as if it were a revelation. As some critics have pointed out, the forum has a history of not reading the content of its meetings until it is too late.

“Davos is consistently wrong about where the world is heading,” writes a senior businessman at Semaphore. Tuesday Editor Liz Hoffman. “Mid-2010s crowds thumbed their noses at Brexit, MAGA, and the subsequent populist wave. In 2020, attendees soaked in communal fondue fountains as COVID-19 visibly spread around the corner. Davos briefly went all-in on the metaverse.”

Overlooking the MAGA mark and the forces that shaped it brings us back to the question of the K-shaped economy, which is by no means unique to the United States.

Deep inequality is inherently destabilizing. History is full of examples, but a quick look at the Iranian headlines in recent weeks can tell you how that risk is unfolding in real time. Years of high inflation and financial mismanagement eroded the wealth of the middle class, and corruption at the top had a serious impact. empowered a few businessmen To enrich yourself. In late December, anger over the disparities boiled over as the country’s currency sank to an all-time low, sparking mass protests and a violent crackdown by Tehran.

If Davos attendees want to learn from the ghosts of Davos’ past, they would be wise to do more than pay lip service to the growing divisions in the capital.

“You can’t maintain this level of public wealth without consequences,” Atwater said. “What I think people at the top are missing is that it could easily become a tipping point if the vulnerabilities become even heavier…We are one step away from something being unleashed.”