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To numerous US citizens, the economic climate over the last half-decade has been tough. Costs have escalated while salaries remains unchanged. Steep mortgage rates have made buying a home a bleak prospect. The unemployment rate has been slowly rising.

Many Americans have reported they're postponing major life decisions, including starting a family or changing careers, because of the instability. But for a very small group of people, the past five-year period couldn't have been more successful.

Fortune Expansion

The wealth of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even amid all the financial uncertainty, the stock market has only kept rising. This growth has mostly helped just a small number of Americans: 10% of the population holds 93% of stock market wealth.

As uneven as this allocation seems, it's the financial structure working as it is existing today.

"Rich elites have purchased 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 stepping into this other chapter of maximum resource removal where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

To help others grasp what exactly it means to be "affluent" in the US, Collins utilizes a concept from journalist Robert Frank who, in a 2007 book on the rich, imagined the different levels of wealth as "Richistan" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize 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 annual salary of at least $110,000 and an total assets 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.

Collectively, the residents of these villages make up 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 flying in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're flying in 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."

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 control that this group has greatly exceeds those who are simply wealthy, let alone the average American who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" fails to address the core issue and has a "hint of elimination" to it.

"It's the distinction between individual behaviors and a framework of policies," Collins said. "We should be worried about an economic system that directs so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins divides it into four parts: acquiring fortune, protecting assets, political capture and hyper-extraction.

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 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 "asset protection sector": the tax lawyers, accountants and wealth managers who use their expertise to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, international accounts, anonymous shell companies, charitable foundations and other vehicles to hold assets," he writes.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and maintain expansion.

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

"Private equity is seeking those corners of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people realize 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 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 paying more for their healthcare, rent and vet bills without seeing any substantial income improvement. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

"The most powerful wealthy elites understand people are being excluded [and] are monetarily hurting," Collins said, adding that right-leaning leaders have been good at accessing a potent "phony populism".

Policy Situation

The contradiction, Collins points out in his book, is that government officials have appointed a string of billionaires to cabinet positions. Along with wealthy entrepreneurs who had brief but powerful roles overseeing substantial reductions 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 congressional allies, helped pass significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the alternative political group, which has also been controlled 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 "alter economic flow", including deep changes to the tax system, boosting the minimum wage and empowering worker groups.

"It was so, so close, and the legislation really did embody the will of the bulk of people who really want lawmakers to solve some of these critical challenges," Collins said. "Oligarchic power is not about creating so much as stopping. It's easier to block than it is to make something significant occur, but the historical precedent is there. We know what that looks like."

Collins is optimistic 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 sustaining a continuous public campaign to make progress on this extreme inequality we're living in," he said. "We can fix this. It is fixable."