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To numerous Americans, the economic climate over the last half-decade has been difficult. Costs have soared while pay remains stagnant. High mortgage rates have made buying a home a grim prospect. The rate of unemployment has been slowly rising.

The majority of individuals have stated they're postponing major life decisions, including starting a family or switching jobs, because of financial volatility. But for a very small group of people, the last five years couldn't have been any better.

Fortune Expansion

The fortune of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even throughout all the economic instability, the stock market has only kept rising. This expansion has largely benefited just a limited group of Americans: 10% of the population controls 93% of stock market wealth.

As uneven as this allocation seems, it's the system working as it is currently designed.

"Affluent individuals have bought their jets, they've purchased their multiple houses and mansions, but now they're acquiring senators and media outlets," stated economic inequality analyst Chuck Collins. "We're now moving into this other chapter of hyper-extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

To help others comprehend what exactly it means to be "rich" in the US, Collins adopts a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Wealthville" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins organizes these "wealth villages" based on income levels:

• At the base level, Affluent Town, are the 10 million Americans who have a family earnings of at least $110,000 and an net worth of over $1.5m.
• The villages get more restricted as wealth goes up: Lower Richistan has 2.6 million households who have wealth between $6m and $13m.
• Middle Richistan has 1.3 million households who have assets worth an average of $37m.
• Upper Richistan, made up of 130,000 Americans (roughly the size of a small city) has between $60m to $1bn in wealth.

In total, the residents of these villages constitute the top 10% of the wealth income distribution, about 14 million Americans altogether, though their circumstances vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're using a private jet. That's a really different cultural experience. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system shuts down – you're set."

Extreme Affluence Consequences

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The control that this group has substantially outweighs those who are simply wealthy, let alone the typical citizen who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" misses the point and has a "hint of elimination" to it.

"It's the separation between private conduct and a framework of policies," Collins commented. "We should be focused on an economic system that channels so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins separates it into four parts: accumulating assets, defending the wealth, policy control and hyper-extraction.

When many Americans think about wealth, they usually think only about the first step, Collins said. People can create a modest amount of wealth through starting or running a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires significant resources and planning in those next three steps. Collins describes what he calls the "asset protection sector": the tax lawyers, accountants and wealth managers who use their expertise to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a wide variety of tools such as trusts, offshore bank accounts, undisclosed businesses, philanthropic entities and other vehicles to hold assets," he explains.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and ensure continued growth.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to touch nearly every single part of an Americans' everyday life largely through investment firms, which allows wealthy individuals to support private companies.

"Private equity is searching for those areas of the economy where they can extract value a little bit harder," Collins said. "One thing I don't think people realize is these billionaire private-equity funds are what happens when so much wealth is parked in so few hands, and they can essentially pivot and say, 'Where else can we generate returns out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can raise their rents."

Tangible Effects

The effects of this inequality go beyond the wealth getting wealthier. It's about people paying more for their healthcare, rent and vet bills without seeing any substantial income improvement. And Collins said the pain and frustration of this kind of society can lead to serious unrest.

"The most powerful wealthy elites understand people are being excluded [and] are financially struggling," Collins said, adding that Republicans have been good at connecting with a potent "phony populism".

Government Truth

The irony, Collins points out in his book, is that political leaders have appointed a series of billionaires to government roles. Along with affluent innovators who had short yet influential roles overseeing significant decreases to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from legislative supporters, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

Future Solutions

While legislative bodies continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been influenced by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "alter economic flow", including substantial modifications to the tax system, increasing the minimum wage and strengthening unions.

"It was so, so close, and the law really did reflect the will of the most of people who really want lawmakers to address some of these critical challenges," Collins said. "Wealthy influence is not about building so much as stopping. It's easier to block than it is to make something meaningful happen, but the historical precedent is there. We know what that looks like."

Collins is hopeful that there can be change, but said it would require sustained political momentum.

"It may be before we know it that the tide turns, and then it really is about maintaining a ongoing grassroots effort to make progress on this extreme inequality we're living in," he said. "We can fix this. It is solvable."