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To numerous US citizens, the economic climate over the recent five-year span has been tough. Prices have skyrocketed while wages remains flat. High mortgage rates have made homeownership a dismal prospect. The unemployment rate has been gradually increasing.

The majority of individuals have reported they're delaying major life decisions, including raising children or changing careers, because of financial volatility. But for a select few of people, the last five years couldn't have been more prosperous.

Wealth Explosion

The wealth of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even during all the market volatility, the stock market has only continued to grow. This expansion has largely benefited just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this distribution seems, it's the financial structure working as it is existing today.

"The wealthy have bought their jets, they've acquired their multiple houses and mansions, but now they're acquiring senators and media outlets," stated economic inequality analyst Chuck Collins. "We're now stepping into this other chapter of hyper-extraction where the wealthy are preying on the system of inequality."

Analyzing Income Brackets

To help others grasp what exactly it means to be "rich" 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 "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize 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 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 comprise 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 traveling in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're flying in 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 collapses – you're set."

The Billionaireville Effect

The peak 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 well-off, let alone the average American who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" misses the point and has a "suggestion of eradication" to it.

"It's the separation between individual behaviors and a structure of regulations," Collins commented. "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 divides it into four parts: acquiring fortune, securing fortune, policy control and hyper-extraction.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a limited sum 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 tactics 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 calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as financial instruments, foreign deposits, undisclosed businesses, non-profit organizations and other vehicles to hold assets," he details.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs political support. Wealth of over $40m converts to political power, Collins says, and can be used to defend wealth and ensure continued growth.

The last stage is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to influence nearly every single part of an Americans' routine activities largely through capital management, which allows wealthy individuals to support private companies.

"Private equity is seeking those areas of the economy where they can extract value 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 accumulated 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 effects 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 suffering and anger of this kind of society can lead to deep discontent.

"The most powerful wealthy elites understand people are being left behind [and] are financially struggling," Collins said, adding that Republicans have been good at accessing a potent "fake grassroots movement".

Political Reality

The irony, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with tech billionaires who had temporary but significant roles overseeing substantial reductions to the federal workforce, other crucial appointments 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 lasting reductions for the wealthy and corporations.

The Path Forward

While legislative bodies continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the opposing party, which has also been controlled by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "change wealth distribution", including deep changes to the tax system, raising the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did embody the will of the majority of people who really want lawmakers to solve some of these critical challenges," Collins said. "Oligarchic power is not about developing so much as stopping. It's easier to block than it is to make something meaningful happen, but the historical precedent 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 quickly that the balance shifts, and then it really is about maintaining a ongoing grassroots effort to make progress on this extreme inequality we're living in," he said. "We can fix this. It is addressable."