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To numerous individuals in the United States, the financial landscape over the recent five-year span has been difficult. Prices have soared while wages remains stagnant. High mortgage rates have made purchasing property a grim prospect. The unemployment rate has been gradually increasing.

The majority of individuals have stated they're delaying major life decisions, including starting a family or changing careers, because of economic uncertainty. But for a tiny fraction of people, the past five-year period couldn't have been any better.

The Billionaire Boom

The wealth of the world's billionaires increased 54% in 2020, at the climax of the pandemic. And even amid all the market volatility, the stock market has only continued to grow. This expansion has largely benefited just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

However unequal as this allocation seems, it's the economic framework working as it is existing today.

"Affluent individuals have purchased their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

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 "Richistan" 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 base level, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an total assets 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 make up 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 said. "Whereas in Upper Richistan, you're using 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."

Extreme Affluence Consequences

The peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The influence that this group has substantially outweighs those who are simply well-off, let alone the typical citizen who doesn't reside 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 difference between individual behaviors and a framework of policies," 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 divides it into four parts: acquiring fortune, securing fortune, policy control and extreme wealth removal.

When many Americans think about wealth, they usually think only about the first step, Collins said. People can create a reasonable quantity of wealth through creating or operating a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires significant resources and planning 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 deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, foreign deposits, secret corporations, philanthropic entities and other vehicles to hold assets," he details.

Government Power and Extreme Wealth Removal

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

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to affect nearly every single part of an Americans' daily existence largely through investment firms, which allows wealthy individuals to invest in 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 comprehend is these billionaire private-equity funds are what happens when so much wealth is stored 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."

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 significant salary growth. And Collins said the pain and frustration of this kind of society can lead to deep discontent.

"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 "phony populism".

Government Truth

The contradiction, Collins points out in his book, is that political leaders have appointed a series of billionaires to administrative posts. Along with tech billionaires who had temporary but significant roles overseeing substantial reductions to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from congressional allies, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While government groups continue to argue that border policies and poor economic deals 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.

Liberal leaders, he argues, know what policies are needed to "change wealth distribution", including significant reforms to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the law really did reflect the will of the majority of people who really want lawmakers to address 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 muscle memory is there. We know what that looks like."

Collins is hopeful that there can be change, but said it would require ongoing legislative effort.

"It may be quickly that the pendulum swings back, and then it really is about preserving a ongoing grassroots effort to make progress on this profound imbalance we're living in," he said. "We can fix this. It is addressable."