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For many Americans, the financial landscape over the last half-decade has been difficult. Expenses have skyrocketed while wages remains flat. Steep mortgage rates have made buying a home a grim prospect. The rate of unemployment has been gradually increasing.

The majority of individuals have indicated they're putting off major life decisions, including having kids or switching jobs, because of economic uncertainty. But for a very small group of people, the past five-year period couldn't have been more prosperous.

The Billionaire Boom

The assets of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even throughout all the market volatility, the stock market has only kept rising. This growth has largely benefited just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

Despite the imbalance as this division seems, it's the economic framework working as it is currently designed.

"Affluent individuals have bought their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," stated inequality researcher Chuck Collins. "We're now moving into this other chapter of maximum resource removal where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

To help others grasp what exactly it means to be "wealthy" 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 update the concept, Collins categorizes these "affluence districts" based on income levels:

• At the lowest tier, 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 exclusive 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 comprise the top 10% of the wealth income distribution, about 14 million Americans altogether, though their experiences vary dramatically.

"You could be in Lower Richistan, and you're still flying in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're flying in a private jet. That's a really distinct lifestyle. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system fails – you're set."

The Billionaireville Effect

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The control that this group has substantially outweighs those who are simply well-off, let alone the ordinary person who doesn't live in "Richistan" at all.

But Collins thinks the progressive slogan "end extreme wealth" misses the point and has a "hint of elimination" to it.

"It's the difference between personal actions and a system of rules," Collins explained. "We should be concerned about an economic system that channels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins divides it into four parts: getting the wealth, protecting assets, political capture and extreme wealth removal.

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 creating or operating a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires substantial commitment 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 knowledge to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, international accounts, undisclosed businesses, charitable foundations and other vehicles to hold assets," he explains.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs policy assistance. Wealth of over $40m becomes political power, Collins says, and can be used to defend wealth 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' routine activities largely through investment firms, which allows wealthy individuals to invest in private companies.

"Private equity is looking for those sectors of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people understand 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 squeeze money out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

Actual Impacts

The consequences of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds for their healthcare, rent and vet bills without seeing any substantial income improvement. And Collins said the hardship and discontent of this kind of society can lead to profound dissatisfaction.

"The most powerful affluent rulers understand people are being marginalized [and] are financially struggling," Collins said, adding that conservative politicians have been good at tapping into a potent "phony populism".

Policy Situation

The contradiction, Collins points out in his book, is that government officials have appointed a succession of billionaires to cabinet positions. Along with affluent innovators who had brief but powerful roles overseeing significant decreases to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from congressional allies, helped pass significant fiscal policies, which will make enduring decreases for the wealthy and corporations.

Future Solutions

While government groups continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been captured by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "change wealth distribution", including significant reforms to the tax system, boosting the minimum wage and empowering worker groups.

"It was so, so close, and the law really did represent the will of the majority of people who really want lawmakers to solve some of these critical challenges," Collins said. "Wealthy influence is not about creating so much as preventing. It's easier to block than it is to make something meaningful happen, but the institutional knowledge is there. We know what that looks like."

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

"It may be before we know it that the balance shifts, and then it really is about preserving a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is addressable."