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Among countless Americans, the economic climate over the recent five-year span has been tough. Expenses have escalated while salaries remains stagnant. High mortgage rates have made purchasing property a dismal prospect. The rate of unemployment has been gradually increasing.

The majority of individuals have indicated they're delaying major life decisions, including having kids or changing careers, because of the instability. But for a very small group of people, the last five years couldn't have been more prosperous.

Fortune Expansion

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 kept rising. This increase has mostly helped just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this distribution seems, it's the economic framework working as it is existing today.

"Affluent individuals have bought their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now entering this other chapter of extreme wealth extraction 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 "Richistan" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

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

• At the foundation, Affluent Town, are the 10 million Americans who have a annual salary 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.

Altogether, 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 sitting 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 separate reality. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system fails – 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 power that this group has substantially outweighs those who are simply well-off, let alone the average American who doesn't live in "Richistan" at all.

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

"It's the difference between private conduct and a system of rules," Collins explained. "We should be concerned 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 separates it into four parts: acquiring fortune, protecting assets, policy control 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 residency in Affluent Town.

But getting to Billionaireville requires serious investment 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 skills 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, foreign deposits, secret corporations, non-profit organizations and other vehicles to hold assets," he writes.

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs government backing. Wealth of over $40m translates to political power, Collins says, and can be used to secure fortune and ensure continued growth.

The last stage 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' routine activities largely through investment firms, which allows wealthy individuals to fund private companies.

"Private equity is looking for 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 parked 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 increase their costs."

Tangible Effects

The results 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 significant salary growth. And Collins said the pain and frustration of this kind of society can lead to deep discontent.

"The most powerful affluent rulers understand people are being left behind [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at tapping into a potent "false common-man appeal".

Political Reality

The paradox, Collins points out in his book, is that government officials have appointed a succession 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 administrative framework, along with help from political partners, helped pass huge tax bills, which will make enduring decreases 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 question becomes: Will the opposing party, which has also been influenced by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "alter economic flow", including substantial modifications to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the law really did reflect the will of the bulk of people who really want lawmakers to fix some of these pressing issues," Collins said. "Oligarchic power is not about developing 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 positive that there can be change, but said it would require ongoing legislative effort.

"It may be quickly that the pendulum swings back, and then it really is about maintaining a continuous public campaign to make progress on this severe disparity we're living in," he said. "We can address this. It is addressable."