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To numerous Americans, the financial landscape over the past five years has been challenging. Costs have soared while pay remains stagnant. Steep mortgage rates have made buying a home a bleak prospect. The jobless rate has been creeping up.

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

Wealth Explosion

The assets of the world's billionaires grew 54% in 2020, at the peak of the pandemic. And even throughout all the economic instability, the stock market has only continued to grow. This increase has primarily advantaged just a small number of Americans: 10% of the population controls 93% of stock market wealth.

As uneven as this allocation seems, it's the economic framework working as it is presently configured.

"Affluent individuals have bought their jets, they've purchased their multiple houses and mansions, but now they're acquiring senators and media outlets," commented wealth disparity expert Chuck Collins. "We're now entering this other chapter of maximum resource removal where the wealthy are preying on the system of inequality."

Analyzing Income Brackets

To help others understand 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, imagined the different levels of wealth as "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins categorizes these "economic communities" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a household income 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.

In total, 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 explained. "Whereas in Upper Richistan, you're traveling via 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."

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 control that this group has substantially outweighs those who are simply wealthy, let alone the average American who doesn't inhabit "Richistan" at all.

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

"It's the separation between individual behaviors and a system of rules," 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: accumulating assets, protecting assets, policy control and maximum resource 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 membership in Affluent Town.

But getting to Billionaireville requires substantial commitment and strategy in those next three steps. Collins describes what he calls the "wealth defense industry": the tax lawyers, accountants and wealth managers who use their skills 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, undisclosed businesses, philanthropic entities and other vehicles to hold assets," he explains.

Government Power and Extreme Wealth Removal

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

The final phase 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 fund private companies.

"Private equity is looking for those corners 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 accumulated 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 boost their expenses."

The Real Consequences

The consequences of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds for their healthcare, rent and vet bills without seeing any meaningful wage increases. And Collins said the pain and frustration of this kind of society can lead to profound dissatisfaction.

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

Policy Situation

The paradox, Collins points out in his book, is that government officials have appointed a string of billionaires to cabinet positions. Along with tech billionaires who had temporary but significant roles overseeing substantial reductions to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from political partners, helped pass significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While political parties continue to argue that border policies and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been controlled by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Left-leaning officials, 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 legislation really did represent the will of the most of people who really want lawmakers to fix some of these urgent problems," Collins said. "Wealthy influence is not about building so much as preventing. 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 hopeful that there can be change, but said it would require continuous government action.

"It may be sooner than expected that the balance shifts, 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 fix this. It is solvable."