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For many US citizens, the financial landscape over the past five years has been tough. Costs have soared while wages remains flat. High mortgage rates have made buying a home a bleak prospect. The rate of unemployment has been gradually increasing.

The majority of individuals 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 recent half-decade couldn't have been more prosperous.

The Billionaire Boom

The fortune of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even throughout all the financial uncertainty, the stock market has only persisted in expanding. This growth has primarily advantaged just a small number of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this division seems, it's the system working as it is presently configured.

"Affluent individuals have acquired their jets, they've purchased their multiple houses and mansions, but now they're securing senators and media outlets," stated inequality researcher Chuck Collins. "We're now entering this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

To help others grasp what exactly it means to be "wealthy" 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 "Affluencia" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins classifies these "wealth villages" 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 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.

In total, 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 sitting 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 different cultural experience. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system collapses – you're set."

Ultra-Wealth Impact

The peak 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 greatly exceeds those who are simply wealthy, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the political catchphrase "abolish billionaires" doesn't capture the real problem and has a "hint of elimination" to it.

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

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins divides it into four parts: acquiring fortune, securing fortune, government influence and maximum resource extraction.

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 residency in Affluent Town.

But getting to Billionaireville requires significant resources 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 expertise to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a extensive selection of tools such as financial instruments, international accounts, anonymous shell companies, philanthropic entities and other vehicles to hold assets," he explains.

Political Influence and Hyper-Extraction

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 secure fortune and protect its accumulation.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to touch nearly every single part of an Americans' routine activities largely through private equity, which allows wealthy individuals to invest in 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 comprehend is these billionaire private-equity funds are what happens when so much wealth is stored in so few hands, and they can essentially pivot 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 raise their rents."

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 substantial income improvement. And Collins said the hardship and discontent of this kind of society can lead to profound dissatisfaction.

"The most powerful oligarchs understand people are being left behind [and] are economically suffering," Collins said, adding that conservative politicians have been good at tapping into a potent "fake grassroots movement".

Political Reality

The contradiction, Collins points out in his book, is that political leaders have appointed a succession of billionaires to cabinet positions. Along with affluent innovators who had brief but powerful roles overseeing significant decreases 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 congressional allies, helped pass huge tax bills, which will make enduring decreases for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that border policies and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been captured by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "alter economic flow", including deep changes to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the legislation really did represent the will of the bulk of people who really want lawmakers to address some of these urgent problems," 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 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 before we know it that the tide turns, and then it really is about maintaining a continuous public campaign to make progress on this extreme inequality we're living in," he said. "We can solve this. It is addressable."