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For many individuals in the United States, the economic climate over the past five years has been difficult. Costs have escalated while pay remains unchanged. High mortgage rates have made homeownership a grim prospect. The jobless rate has been slowly rising.

The majority of individuals have stated they're putting off major life decisions, including raising children or changing careers, because of financial volatility. But for a tiny fraction of people, the recent half-decade couldn't have been more prosperous.

The Billionaire Boom

The wealth of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even during all the financial uncertainty, the stock market has only continued to grow. 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 distribution seems, it's the system working as it is presently configured.

"The wealthy have purchased their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now entering this other chapter of extreme wealth extraction where the wealthy are preying on the system of inequality."

Mapping Economic Classes

To help others understand 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 "Affluencia" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

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

• At the foundation, 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.

Altogether, the residents of these villages comprise the top 10% of the wealth income distribution, about 14 million Americans altogether, though their lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really different cultural experience. You fly private, you have no investment 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 influence that this group has substantially outweighs those who are simply wealthy, let alone the typical citizen who doesn't live in "Richistan" at all.

But Collins thinks the progressive slogan "billionaires shouldn't exist" misses the point and has a "whiff of exterminism" to it.

"It's the separation between private conduct and a structure of regulations," Collins explained. "We should be worried about an economic system that funnels so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: accumulating assets, protecting assets, 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 admission in Affluent Town.

But getting to Billionaireville requires substantial commitment and tactics 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 extensive selection of tools such as financial instruments, international accounts, undisclosed businesses, philanthropic entities and other mechanisms to hold assets," he details.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to defend wealth and ensure continued growth.

The final phase is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to influence nearly every single part of an Americans' routine activities largely through capital management, which allows wealthy individuals to support private companies.

"Private equity is looking for those areas of the economy where they can squeeze things 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 stored in so few hands, and they can basically shift and say, 'Where else can we extract profits out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can raise their rents."

Actual Impacts

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 meaningful wage increases. And Collins said the suffering and anger of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being marginalized [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at accessing a potent "false common-man appeal".

Government Truth

The contradiction, Collins points out in his book, is that government officials have appointed a series of billionaires to administrative posts. Along with tech billionaires who had temporary but significant roles overseeing massive cuts 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 major tax legislation, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While government groups continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the issue remains: Will the alternative political group, which has also been captured by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "alter economic flow", including substantial modifications to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did embody the will of the bulk of people who really want lawmakers to address some of these pressing issues," Collins said. "Wealthy influence is not about developing so much as stopping. It's easier to block than it is to make something substantial take place, but the historical precedent 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 sooner than expected that the tide turns, and then it really is about preserving a continuous public campaign to make progress on this profound imbalance we're living in," he said. "We can address this. It is solvable."