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To numerous Americans, the economy over the past five years has been challenging. Costs have soared while wages remains unchanged. Elevated mortgage rates have made buying a home a bleak prospect. The unemployment rate has been slowly rising.

Most people have indicated they're postponing major life decisions, including starting a family or switching jobs, because of financial volatility. But for a tiny fraction of people, the last five years couldn't have been more prosperous.

The Billionaire Boom

The wealth of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even throughout all the market volatility, the stock market has only persisted in expanding. This increase has largely benefited just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the financial structure working as it is currently designed.

"Affluent individuals have acquired their jets, they've purchased their multiple houses and mansions, but now they're acquiring senators and media outlets," stated inequality researcher 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 "wealthy" in the US, Collins utilizes a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Wealthville" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins organizes these "wealth villages" based on income levels:

• At the base level, 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 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.

Collectively, 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 flying in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really separate reality. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system fails – 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 wealthiest. The power that this group has far surpasses those who are simply well-off, let alone the typical citizen who doesn't live in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" misses the point and has a "suggestion of eradication" to it.

"It's the separation between private conduct and a structure of regulations," Collins commented. "We should be concerned about an economic system that channels 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: getting the wealth, securing fortune, political capture 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 planning 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 strategic about their taxes.

"Wealth defense professionals use a wide variety of tools such as trusts, international accounts, anonymous shell companies, charitable foundations and other vehicles to hold assets," he explains.

Political Influence and Hyper-Extraction

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

The ultimate step 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' everyday life largely through investment firms, which allows wealthy individuals to invest in private companies.

"Private equity is searching for those areas of the economy where they can squeeze things 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 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 boost their expenses."

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 significant salary growth. And Collins said the hardship and discontent of this kind of society can lead to profound dissatisfaction.

"The most powerful affluent rulers understand people are being excluded [and] are financially struggling," Collins said, adding that Republicans have been good at tapping into a potent "false common-man appeal".

Policy Situation

The irony, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with wealthy entrepreneurs who had short yet influential roles overseeing massive cuts to the federal workforce, other crucial appointments 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 legislative bodies continue to argue that border policies and poor economic deals are the source of everyone's economic problems, "the question becomes: 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 deep changes to the tax system, increasing the minimum wage and strengthening unions.

"It was so, so close, and the bill really did embody the will of the bulk of people who really want lawmakers to solve some of these urgent problems," Collins said. "Elite control is not about creating so much as blocking. It's easier to block than it is to make something meaningful happen, but the institutional knowledge is there. We know what that looks like."

Collins is positive that there can be change, but said it would require sustained political momentum.

"It may be sooner than expected that the pendulum swings back, and then it really is about preserving a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is fixable."