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To numerous US citizens, the economic climate over the past five years has been tough. Prices have escalated while pay remains unchanged. Elevated mortgage rates have made homeownership a grim prospect. The unemployment rate has been creeping up.

Most people have indicated they're putting off major life decisions, including starting a family or changing careers, because of the instability. But for a select few of people, the past five-year period couldn't have been any better.

Fortune Expansion

The assets of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even during 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 distribution seems, it's the financial structure working as it is existing today.

"Rich elites have acquired their jets, they've purchased 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 extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

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

To modernize 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 household income 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 constitute 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 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 interest 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 richest. 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 progressive slogan "end extreme wealth" doesn't capture the real problem and has a "hint of elimination" to it.

"It's the distinction between private conduct and a framework of policies," Collins explained. "We should be worried about 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 breaks it down into four parts: accumulating assets, defending the wealth, policy control and extreme wealth removal.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a limited sum of wealth through starting or running a successful business, which could get them residency 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 legal entities, foreign deposits, secret corporations, non-profit organizations and other methods to hold assets," he details.

Government Power and Extreme Wealth Removal

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

The last stage is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to affect nearly every single part of an Americans' everyday life largely through capital management, which allows wealthy individuals to fund private companies.

"Private equity is seeking those corners 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 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 raise their rents."

Actual Impacts

The consequences 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 profound dissatisfaction.

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

Policy Situation

The paradox, Collins points out in his book, is that elected representatives have appointed a succession of billionaires to cabinet positions. Along with wealthy entrepreneurs who had short yet influential roles overseeing massive cuts 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 congressional allies, helped pass major tax legislation, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While political parties continue to argue that border policies and poor economic deals 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 "change wealth distribution", including significant reforms to the tax system, raising the minimum wage and supporting labor organizations.

"It was so, so close, and the law really did embody the will of the bulk of people who really want lawmakers to solve some of these pressing issues," Collins said. "Wealthy influence is not about creating so much as stopping. It's easier to block than it is to make something significant occur, but the institutional knowledge is there. We know what that looks like."

Collins is hopeful that there can be change, but said it would require continuous government action.

"It may be quickly that the balance shifts, and then it really is about maintaining a ongoing grassroots effort to make progress on this severe disparity we're living in," he said. "We can fix this. It is fixable."