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Among countless Americans, the economy over the recent five-year span has been difficult. Costs have soared while salaries remains stagnant. High mortgage rates have made purchasing property a bleak prospect. The rate of unemployment has been creeping up.

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

The Billionaire Boom

The fortune of the world's billionaires grew 54% in 2020, at the climax of the pandemic. And even amid all the financial uncertainty, the stock market has only persisted in expanding. This expansion has mostly helped just a small number of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the system working as it is currently designed.

"The wealthy have purchased their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," explained inequality researcher Chuck Collins. "We're now moving into this other chapter of extreme wealth 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 utilizes a concept from journalist Robert Frank who, in a 2007 book on the rich, envisioned the different levels of wealth as "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins classifies these "economic communities" 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 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 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 sitting in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're using 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."

Extreme Affluence Consequences

The highest hill 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 affluent, let alone the typical citizen who doesn't live in "Richistan" at all.

But Collins thinks the political catchphrase "billionaires shouldn't exist" doesn't capture the real problem and has a "hint of elimination" to it.

"It's the distinction between private conduct and a system of rules," Collins said. "We should be focused on an economic system that funnels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: getting the wealth, securing fortune, 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 membership in Affluent Town.

But getting to Billionaireville requires significant resources and strategy 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 strategic about their taxes.

"Wealth defense professionals use a wide variety of tools such as trusts, international accounts, anonymous shell companies, philanthropic entities and other mechanisms to hold assets," he writes.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and protect its accumulation.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to affect nearly every single part of an Americans' everyday life largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is seeking 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 parked in so few hands, and they can basically shift 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 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 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 left behind [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at connecting with a potent "false common-man appeal".

Political Reality

The contradiction, Collins points out in his book, is that government officials have appointed a series of billionaires to cabinet positions. Along with affluent innovators who had short yet influential roles overseeing substantial reductions to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from political partners, helped pass significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While government groups continue to argue that border policies and bad trade agreements are the source of everyone's economic problems, "the issue remains: Will the alternative political group, which has also been controlled by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "change wealth distribution", including significant reforms 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 most of people who really want lawmakers to address some of these critical challenges," Collins said. "Oligarchic power is not about developing so much as blocking. 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 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 severe disparity we're living in," he said. "We can solve this. It is fixable."