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For many US citizens, the financial landscape over the past five years has been tough. Costs have soared while wages remains unchanged. Elevated mortgage rates have made homeownership a dismal prospect. The unemployment rate has been gradually increasing.

The majority of individuals have reported they're delaying major life decisions, including having kids or switching jobs, because of economic uncertainty. But for a tiny fraction of people, the last five years couldn't have been more successful.

Wealth Explosion

The assets of the world's billionaires grew 54% in 2020, at the peak of the pandemic. And even during all the financial uncertainty, the stock market has only persisted in expanding. This growth has mostly helped just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this distribution seems, it's the financial structure working as it is existing today.

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

Analyzing Income Brackets

To help others comprehend 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 "Affluencia" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins categorizes these "economic communities" 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 overall wealth 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.

Altogether, 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 sitting in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're using a private jet. That's a really distinct lifestyle. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system collapses – you're set."

Ultra-Wealth Impact

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The power that this group has substantially outweighs those who are simply well-off, let alone the ordinary person who doesn't reside in "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 individual behaviors and a framework of policies," Collins commented. "We should be focused on an economic system that funnels so much wealth upward to the billionaires."

Fortune Building Strategies

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

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a limited sum of wealth through establishing or managing a successful business, which could get them membership in Affluent Town.

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

"Wealth defense professionals use a extensive selection of tools such as legal entities, offshore bank accounts, secret corporations, non-profit organizations and other mechanisms to hold assets," he writes.

Political Influence and Hyper-Extraction

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

The last stage 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 private equity, which allows wealthy individuals to support private companies.

"Private equity is seeking those areas of the economy where they can increase profits 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 stored in so few hands, and they can kind of turn around 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 increase their costs."

The Real Consequences

The consequences of this inequality go beyond the wealth getting wealthier. It's about people facing higher costs for their healthcare, rent and vet bills without seeing any significant salary growth. And Collins said the hardship and discontent of this kind of society can lead to profound dissatisfaction.

"The most powerful oligarchs understand people are being marginalized [and] are financially struggling," Collins said, adding that conservative politicians have been good at connecting with a potent "fake grassroots movement".

Policy Situation

The paradox, Collins points out in his book, is that government officials have appointed a succession of billionaires to administrative posts. Along with affluent innovators who had short yet influential roles overseeing significant decreases to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from political partners, helped pass major tax legislation, which will make lasting reductions for the wealthy and corporations.

The Path Forward

While government groups continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the opposing party, which has also been influenced 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 "reverse the updraft of wealth", including substantial modifications to the tax system, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the law really did embody the will of the majority of people who really want lawmakers to solve some of these urgent problems," Collins said. "Elite control is not about building so much as blocking. It's easier to block than it is to make something substantial take place, 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 ongoing legislative effort.

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