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For many Americans, the economic climate over the recent five-year span has been challenging. Prices have skyrocketed while salaries remains stagnant. Elevated mortgage rates have made homeownership a grim prospect. The jobless rate has been creeping up.

Most people have indicated they're postponing major life decisions, including having kids or switching jobs, because of the instability. But for a tiny fraction of people, the past five-year period couldn't have been more successful.

The Billionaire Boom

The fortune of the world's billionaires increased 54% in 2020, at the climax of the pandemic. And even throughout all the market volatility, the stock market has only continued to grow. This expansion has largely benefited just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

However unequal as this division seems, it's the financial structure working as it is existing today.

"Rich elites have purchased their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," stated inequality researcher Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

To help others grasp what exactly it means to be "rich" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, envisioned the different levels of wealth as "Affluencia" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins classifies these "affluence districts" 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 net worth 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 comprise 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 flying 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 distinct lifestyle. You fly private, you have no stakes 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 substantially outweighs those who are simply well-off, let alone the average American who doesn't reside in "Richistan" at all.

But Collins thinks the political catchphrase "billionaires shouldn't exist" doesn't capture the real problem and has a "suggestion of eradication" to it.

"It's the difference between private conduct and a system of rules," 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 divides it into four parts: acquiring fortune, defending the wealth, policy control and maximum resource 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 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 knowledge to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, foreign deposits, anonymous shell companies, charitable foundations and other vehicles to hold assets," he details.

Government Power and Extreme Wealth Removal

To further 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 final phase 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' daily existence largely through capital management, 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 comprehend is these billionaire private-equity funds are what happens when so much wealth is parked in so few hands, and they can basically shift and say, 'Where else can we extract profits out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can raise their rents."

Tangible Effects

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 suffering and anger of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being marginalized [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at tapping into a potent "fake grassroots movement".

Political Reality

The irony, Collins points out in his book, is that elected representatives have appointed a series of billionaires to cabinet positions. Along with affluent innovators who had temporary but significant 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 huge tax bills, which will make enduring decreases for the wealthy and corporations.

Future Solutions

While legislative bodies continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the opposing party, which has also been controlled by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "change wealth distribution", including substantial modifications to the tax system, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did embody the will of the majority of people who really want lawmakers to solve some of these pressing issues," Collins said. "Oligarchic power is not about building so much as blocking. 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 sustained political momentum.

"It may be before we know it that the balance shifts, and then it really is about sustaining a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is addressable."