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Among countless Americans, the financial landscape over the past five years has been challenging. Prices have escalated while wages remains flat. Steep mortgage rates have made purchasing property a grim prospect. The unemployment rate has been creeping up.

Most people have reported they're postponing major life decisions, including having kids or changing careers, because of the instability. But for a tiny fraction of people, the last five years couldn't have been any better.

Fortune Expansion

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 growth has mostly helped just a small number of Americans: 10% of the population holds 93% of stock market wealth.

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

"Rich elites have purchased their jets, they've acquired their multiple houses and mansions, but now they're acquiring senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now moving into this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

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 organizes these "wealth villages" 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 total assets of over $1.5m.
• The villages get more select 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 circumstances vary dramatically.

"You could be in Lower Richistan, and you're still traveling in the coach section of a commercial plane," Collins explained. "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 shuts down – you're set."

Ultra-Wealth Impact

The peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The influence that this group has greatly exceeds those who are simply wealthy, let alone the ordinary person who doesn't live in "Richistan" at all.

But Collins thinks the progressive slogan "billionaires shouldn't exist" fails to address the core issue and has a "suggestion of eradication" to it.

"It's the separation between private conduct and a structure of regulations," Collins said. "We should be concerned 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: acquiring fortune, securing fortune, government influence 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 establishing or managing a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires serious investment and planning 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 deliberate about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, foreign deposits, anonymous shell companies, philanthropic entities and other methods to hold assets," he details.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to secure fortune and protect its accumulation.

The ultimate step 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 invest in private companies.

"Private equity is looking for those sectors of the economy where they can increase profits 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 basically shift 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 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 substantial income improvement. And Collins said the suffering and anger of this kind of society can lead to profound dissatisfaction.

"The most powerful oligarchs understand people are being excluded [and] are financially struggling," Collins said, adding that conservative politicians have been good at accessing a potent "phony populism".

Political Reality

The irony, Collins points out in his book, is that political leaders have appointed a series of billionaires to administrative posts. Along with wealthy entrepreneurs who had brief but powerful roles overseeing massive cuts to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from congressional allies, helped pass major tax legislation, which will make enduring decreases for the wealthy and corporations.

The Path Forward

While political parties continue to argue that border policies and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the other major party, which has also been controlled by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "alter economic flow", including deep changes to the tax system, increasing the minimum wage and empowering worker groups.

"It was so, so close, and the law really did represent the will of the majority of people who really want lawmakers to address some of these pressing issues," Collins said. "Elite control is not about developing 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 positive that there can be change, but said it would require sustained political momentum.

"It may be before we know it that the balance shifts, and then it really is about maintaining a sustained really popular movement to make progress on this extreme inequality we're living in," he said. "We can address this. It is fixable."