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To numerous US citizens, the economic climate over the past five years has been challenging. Costs have escalated while pay remains flat. Elevated mortgage rates have made purchasing property a dismal prospect. The rate of unemployment has been gradually increasing.

The majority of individuals have reported they're delaying major life decisions, including starting a family or moving to new employment, because of financial volatility. But for a tiny fraction of people, the recent half-decade couldn't have been more successful.

Fortune Expansion

The wealth of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even during all the economic instability, the stock market has only persisted in expanding. This expansion has mostly helped 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 financial structure working as it is presently configured.

"Affluent individuals have acquired their jets, they've acquired 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 hyper-extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

To help others comprehend 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, envisioned the different levels of wealth as "Wealthville" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize 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.

Collectively, the residents of these villages make up 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 noted. "Whereas in Upper Richistan, you're using a private jet. That's a really separate reality. 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."

Ultra-Wealth Impact

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The power that this group has greatly exceeds those who are simply affluent, let alone the ordinary person who doesn't inhabit "Richistan" at all.

But Collins thinks the progressive slogan "abolish billionaires" doesn't capture the real problem and has a "whiff of exterminism" to it.

"It's the distinction between individual behaviors and a system of rules," Collins explained. "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: acquiring fortune, defending the wealth, policy control and hyper-extraction.

When many Americans think about wealth, they usually think only about the first step, Collins said. People can create a reasonable quantity 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 "wealth defense industry": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, offshore bank accounts, anonymous shell companies, charitable foundations and other methods to hold assets," he explains.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs political support. Wealth of over $40m becomes political power, Collins says, and can be used to secure fortune and protect its accumulation.

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 fund private companies.

"Private equity is seeking those corners of the economy where they can squeeze things 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 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 increase their costs."

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 meaningful wage increases. 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 financially struggling," Collins said, adding that right-leaning leaders have been good at tapping into a potent "false common-man appeal".

Political Reality

The contradiction, Collins points out in his book, is that political leaders have appointed a series of billionaires to government roles. Along with wealthy entrepreneurs who had short yet influential roles overseeing significant decreases to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from political partners, helped pass significant fiscal policies, which will make enduring decreases for the wealthy and corporations.

Potential Changes

While political parties continue to argue that border policies and poor economic deals are the source of everyone's economic problems, "the issue remains: Will the alternative political group, 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 deep changes to the tax system, raising the minimum wage and supporting labor organizations.

"It was so, so close, and the legislation really did embody the will of the most of people who really want lawmakers to fix some of these critical challenges," Collins said. "Wealthy influence is not about creating so much as blocking. It's easier to block than it is to make something meaningful happen, but the historical precedent is there. We know what that looks like."

Collins is hopeful 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 maintaining a sustained really popular movement to make progress on this extreme inequality we're living in," he said. "We can solve this. It is fixable."