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For many Americans, the financial landscape over the past five years has been difficult. Expenses have skyrocketed while salaries remains stagnant. Elevated mortgage rates have made homeownership a dismal prospect. The unemployment rate has been gradually increasing.

Most people have reported they're delaying major life decisions, including having kids or changing careers, because of the instability. But for a very small group of people, the recent half-decade couldn't have been more successful.

The Billionaire Boom

The wealth of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even during all the financial uncertainty, the stock market has only continued to grow. This growth has mostly helped just a small number of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this division seems, it's the economic framework working as it is presently configured.

"Affluent individuals have bought their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," stated economic inequality analyst Chuck Collins. "We're now entering this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

To help others grasp what exactly it means to be "wealthy" in the US, Collins utilizes 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 update the concept, Collins classifies 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 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.

Altogether, the residents of these villages constitute 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 traveling 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 separate reality. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system fails – you're set."

Ultra-Wealth Impact

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

But Collins thinks the political catchphrase "end extreme wealth" doesn't capture the real problem and has a "whiff of exterminism" to it.

"It's the distinction between private conduct and a structure of regulations," Collins said. "We should be concerned about an economic system that directs so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins separates it into four parts: accumulating assets, protecting assets, policy control and maximum resource extraction.

When many Americans think about wealth, they usually think solely 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 substantial commitment 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 skills to ensure that the super rich are being deliberate about their taxes.

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

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs political support. Wealth of over $40m becomes political power, Collins says, and can be used to protect assets 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 influence nearly every single part of an Americans' everyday life largely through capital management, which allows wealthy individuals to fund private companies.

"Private equity is searching for those areas of the economy where they can squeeze things 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 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 boost their expenses."

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 substantial income improvement. And Collins said the pain and frustration of this kind of society can lead to deep discontent.

"The most powerful affluent rulers understand people are being excluded [and] are economically suffering," Collins said, adding that right-leaning leaders have been good at accessing a potent "fake grassroots movement".

Government Truth

The paradox, Collins points out in his book, is that government officials have appointed a series of billionaires to administrative posts. Along with affluent innovators who had short yet influential roles overseeing significant decreases to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from legislative supporters, helped pass significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While government groups continue to argue that border policies and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the opposing party, which has also been captured 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 "reverse the updraft of wealth", including significant reforms to the tax system, increasing the minimum wage and empowering worker groups.

"It was so, so close, and the legislation really did represent 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 building so much as stopping. It's easier to block than it is to make something meaningful happen, 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 sustained political momentum.

"It may be before we know it 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 solvable."