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To numerous Americans, the economy over the past five years has been difficult. Prices have soared while pay remains flat. Steep mortgage rates have made homeownership a grim prospect. The unemployment rate has been gradually increasing.

Most people have stated they're delaying major life decisions, including starting a family or changing careers, because of financial volatility. But for a very small group of people, the last five years couldn't have been any better.

The Billionaire Boom

The assets of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even throughout all the economic instability, the stock market has only kept rising. This expansion has largely benefited just a small number of Americans: 10% of the population controls 93% of stock market wealth.

However unequal as this allocation seems, it's the system working as it is presently configured.

"Rich elites have purchased 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 stepping into this other chapter of hyper-extraction where the wealthy are preying on the system of inequality."

Analyzing Income Brackets

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, envisioned the different levels of wealth as "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins classifies these "economic communities" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an net worth 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.

Altogether, 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 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 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."

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 richest. The power that this group has substantially outweighs those who are simply wealthy, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the progressive slogan "end extreme wealth" fails to address the core issue and has a "hint of elimination" to it.

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

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: getting the wealth, defending the wealth, government influence and extreme wealth removal.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a modest amount of wealth through starting or running 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 "wealth defense industry": the tax lawyers, accountants and wealth managers who use their knowledge to ensure that the super rich are being deliberate about their taxes.

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

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m converts to political power, Collins says, and can be used to secure fortune and ensure continued growth.

The final phase 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' daily existence largely through investment firms, 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 understand 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 generate returns 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 results 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 profound dissatisfaction.

"The most powerful wealthy elites understand people are being marginalized [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at accessing a potent "phony populism".

Political Reality

The paradox, Collins points out in his book, is that government officials have appointed a succession of billionaires to administrative posts. Along with affluent innovators 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 legislative supporters, helped pass major tax legislation, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that foreign entry and unfavorable commercial treaties are the source of everyone's economic problems, "the issue remains: 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 "change wealth distribution", including deep changes to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the law really did reflect the will of the most of people who really want lawmakers to address some of these pressing issues," Collins said. "Oligarchic power is not about developing so much as blocking. It's easier to block than it is to make something substantial take place, 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 ongoing legislative effort.

"It may be quickly that the pendulum swings back, and then it really is about preserving a ongoing grassroots effort to make progress on this extreme inequality we're living in," he said. "We can fix this. It is addressable."