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To numerous individuals in the United States, the economic climate over the last half-decade has been difficult. Costs have soared while salaries remains flat. High mortgage rates have made homeownership a bleak prospect. The unemployment rate has been slowly rising.

Many Americans have stated they're postponing major life decisions, including raising children or moving to new employment, because of economic uncertainty. But for a select few of people, the recent half-decade couldn't have been more successful.

Wealth Explosion

The wealth of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even amid all the economic instability, the stock market has only continued to grow. This increase has largely benefited just a small number of Americans: 10% of the population holds 93% of stock market wealth.

However unequal as this division seems, it's the system working as it is presently configured.

"The wealthy have acquired their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," explained economic inequality analyst Chuck Collins. "We're now stepping into this other chapter of maximum resource removal where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

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

To contemporize 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 lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still flying in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're using a private jet. That's a really different cultural experience. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system shuts down – you're set."

The Billionaireville Effect

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The control that this group has far surpasses those who are simply affluent, let alone the average American who doesn't live in "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" doesn't capture the real problem and has a "suggestion of eradication" to it.

"It's the distinction between private conduct and a framework of policies," Collins commented. "We should be focused on 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: getting the wealth, defending the wealth, government influence 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 creating or operating a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires serious investment 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 expertise to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, international accounts, 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 government backing. Wealth of over $40m translates to 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 capital management, which allows wealthy individuals to invest in private companies.

"Private equity is seeking those sectors of the economy where they can extract value 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 parked in so few hands, and they can essentially pivot 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."

Actual Impacts

The effects 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 wealthy elites understand people are being excluded [and] are monetarily hurting," Collins said, adding that Republicans have been good at accessing a potent "phony populism".

Government Truth

The contradiction, Collins points out in his book, is that elected representatives have appointed a string of billionaires to administrative posts. Along with wealthy entrepreneurs who had brief but powerful 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 significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

Future Solutions

While political parties continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the opposing party, which has also been controlled by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "reverse the updraft of wealth", including deep changes to the tax system, boosting the minimum wage and empowering worker groups.

"It was so, so close, and the bill really did reflect the will of the majority of people who really want lawmakers to fix some of these pressing issues," Collins said. "Elite control is not about creating so much as preventing. It's easier to block than it is to make something significant occur, but the historical precedent is there. We know what that looks like."

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

"It may be quickly that the pendulum swings back, and then it really is about sustaining a ongoing grassroots effort to make progress on this extreme inequality we're living in," he said. "We can solve this. It is fixable."