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To numerous US citizens, the economic climate over the last half-decade has been difficult. Prices have soared while pay remains stagnant. Elevated mortgage rates have made buying a home a dismal prospect. The rate of unemployment has been gradually increasing.

Many Americans have indicated they're putting off major life decisions, including starting a family or moving to new employment, because of the instability. But for a select few of people, the last five years couldn't have been more successful.

Wealth Explosion

The wealth of the world's billionaires grew 54% in 2020, at the peak of the pandemic. And even throughout all the financial uncertainty, the stock market has only continued to grow. This increase has primarily advantaged just a small number of Americans: 10% of the population owns 93% of stock market wealth.

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

"The wealthy have acquired their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," stated wealth disparity expert Chuck Collins. "We're now entering this other chapter of maximum resource removal where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

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, imagined the different levels of wealth as "Wealthville" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins classifies these "wealth villages" based on income levels:

• At the base level, Affluent Town, are the 10 million Americans who have a household income 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 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 traveling 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 fails – 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 most affluent. The influence that this group has substantially outweighs those who are simply well-off, let alone the average American who doesn't inhabit "Richistan" at all.

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

"It's the difference between private conduct and a structure of regulations," Collins said. "We should be worried about an economic system that channels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

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

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a reasonable quantity of wealth through creating or operating a successful business, which could get them admission 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 expertise to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, international accounts, secret corporations, charitable foundations and other methods to hold assets," he details.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m translates to political power, Collins says, and can be used to secure fortune and maintain expansion.

The final phase 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' daily existence largely through private equity, which allows wealthy individuals to fund private companies.

"Private equity is seeking 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 parked 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 economically suffering," Collins said, adding that right-leaning leaders have been good at accessing a potent "phony populism".

Political Reality

The irony, 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 important roles for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from legislative supporters, helped pass significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

Potential Changes

While government groups continue to argue that immigration and unfavorable commercial treaties 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 effectively tackle the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "change wealth distribution", including substantial modifications to the tax system, boosting the minimum wage and empowering worker groups.

"It was so, so close, and the law really did embody the will of the bulk of people who really want lawmakers to address some of these urgent problems," Collins said. "Wealthy influence is not about building so much as stopping. It's easier to block than it is to make something significant occur, 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 before we know it 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 address this. It is addressable."