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Among countless individuals in the United States, the economy over the past five years has been tough. Costs have skyrocketed while salaries remains flat. Steep mortgage rates have made homeownership a dismal prospect. The jobless rate has been creeping up.

Many Americans have reported they're delaying major life decisions, including raising children or moving to new employment, because of financial volatility. But for a tiny fraction of people, the past five-year period couldn't have been more successful.

Wealth Explosion

The assets of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even throughout all the economic instability, the stock market has only kept rising. This increase has primarily advantaged just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this allocation seems, it's the system working as it is currently designed.

"The wealthy have acquired their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

To help others comprehend what exactly it means to be "rich" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Richistan" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins organizes these "economic communities" 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 exclusive 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 noted. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really different cultural experience. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system shuts down – you're set."

The Billionaireville Effect

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The power that this group has substantially outweighs those who are simply well-off, let alone the ordinary person who doesn't inhabit "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 distinction between individual behaviors and a structure of regulations," Collins explained. "We should be concerned about an economic system that directs so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins divides it into four parts: acquiring fortune, securing fortune, policy control and extreme wealth removal.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a reasonable quantity of wealth through starting or running 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 "fortune security field": the tax lawyers, accountants and wealth managers who use their knowledge to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as financial instruments, foreign deposits, secret corporations, non-profit organizations 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 defend wealth 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 influence nearly every single part of an Americans' everyday life largely through private equity, which allows wealthy individuals to invest in private companies.

"Private equity is searching for those sectors 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 stored in so few hands, and they can kind of turn around 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 increase their costs."

Actual Impacts

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 pain and frustration of this kind of society can lead to deep discontent.

"The most powerful affluent rulers understand people are being left behind [and] are monetarily hurting," Collins said, adding that Republicans have been good at accessing a potent "fake grassroots movement".

Government Truth

The irony, Collins points out in his book, is that government officials have appointed a series of billionaires to government roles. Along with affluent innovators who had temporary but significant roles overseeing significant decreases to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from congressional allies, helped pass huge tax bills, which will make enduring decreases for the wealthy and corporations.

The Path Forward

While government groups continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the opposing party, which has also been influenced 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 substantial modifications to the tax system, raising the minimum wage and empowering worker groups.

"It was so, so close, and the bill 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 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 ongoing legislative effort.

"It may be sooner than expected that the balance shifts, and then it really is about preserving a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is addressable."