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To numerous individuals in the United States, the economic climate over the recent five-year span has been difficult. Prices have escalated while wages remains flat. Steep mortgage rates have made buying a home a grim prospect. The rate of unemployment has been gradually increasing.

Most people have reported they're putting off major life decisions, including raising children or switching jobs, because of financial volatility. But for a tiny fraction of people, the past five-year period couldn't have been any better.

The Billionaire Boom

The wealth of the world's billionaires grew 54% in 2020, at the peak of the pandemic. And even amid all the market volatility, the stock market has only kept rising. This expansion has primarily advantaged just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

However unequal as this allocation seems, it's the economic framework working as it is currently designed.

"The wealthy have acquired their jets, they've bought their multiple houses and mansions, but now they're securing senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now entering this other chapter of hyper-extraction where the wealthy are preying on the system of inequality."

Mapping Economic Classes

To help others understand 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, envisioned the different levels of wealth as "Richistan" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize 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 household income of at least $110,000 and an net worth 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 circumstances vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're using a private jet. That's a really separate reality. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system shuts down – you're set."

Extreme Affluence Consequences

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The influence that this group has far surpasses those who are simply affluent, let alone the ordinary person who doesn't live in "Richistan" at all.

But Collins thinks the progressive slogan "abolish billionaires" misses the point and has a "whiff of exterminism" to it.

"It's the separation between personal actions and a system of rules," Collins said. "We should be focused on 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 separates it into four parts: accumulating assets, defending the wealth, 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 modest amount of wealth through establishing or managing a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires substantial commitment and strategy 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 wide variety of tools such as trusts, foreign deposits, undisclosed businesses, philanthropic entities and other mechanisms to hold assets," he details.

Political Influence and Hyper-Extraction

To further a wealth defense strategy, a family needs political support. Wealth of over $40m translates to 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' routine activities largely through investment firms, which allows wealthy individuals to support private companies.

"Private equity is searching for those corners of the economy where they can increase profits 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 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."

Actual Impacts

The consequences of this inequality go beyond the wealth getting wealthier. It's about people paying more 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 tapping into a potent "fake grassroots movement".

Political Reality

The paradox, Collins points out in his book, is that government officials have appointed a series of billionaires to cabinet positions. Along with tech billionaires who had temporary but significant 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 major tax legislation, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While political parties continue to argue that border policies and bad trade agreements are the source of everyone's economic problems, "the issue remains: Will the opposing party, which has also been captured by the billionaires and big money, be able to meaningfully address 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, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the law really did represent the will of the majority of people who really want lawmakers to solve 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 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 continuous government action.

"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 profound imbalance we're living in," he said. "We can fix this. It is addressable."