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To numerous Americans, the economy over the past five years has been difficult. Costs have soared while wages remains flat. High mortgage rates have made buying a home a dismal prospect. The rate of unemployment has been gradually increasing.

Many Americans have reported they're postponing major life decisions, including having kids or switching jobs, because of the instability. But for a very small group of people, the last five years couldn't have been any better.

Wealth Explosion

The wealth of the world's billionaires grew 54% in 2020, at the climax of the pandemic. And even during all the market volatility, the stock market has only kept rising. This expansion has primarily advantaged just a tiny percentage of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the system working as it is presently configured.

"The wealthy have bought their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," explained inequality researcher Chuck Collins. "We're now entering this other chapter of maximum resource removal where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

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, imagined the different levels of wealth as "Affluencia" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins categorizes these "affluence districts" based on income levels:

• At the lowest tier, 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.

In total, the residents of these villages make up the top 10% of the wealth income distribution, about 14 million Americans altogether, though their experiences vary dramatically.

"You could be in Lower Richistan, and you're still traveling 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 highest hill 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 average American who doesn't reside in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" fails to address the core issue and has a "whiff of exterminism" to it.

"It's the distinction between private conduct and a structure of regulations," Collins explained. "We should be focused on an economic system that funnels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins divides it into four parts: acquiring fortune, defending the wealth, political capture and maximum resource 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 creating or operating a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires serious investment and tactics 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 deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as financial instruments, international accounts, 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 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 "extreme removal" to describe how the wealthy have come to influence nearly every single part of an Americans' routine activities largely through private equity, which allows wealthy individuals to fund private companies.

"Private equity is looking for those areas of the economy where they can extract value 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 extract profits out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can increase their costs."

Actual Impacts

The consequences of this inequality go beyond the wealth getting wealthier. It's about people facing higher costs 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 serious unrest.

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

Government Truth

The paradox, Collins points out in his book, is that political leaders have appointed a succession of billionaires to administrative posts. Along with tech billionaires who had short yet influential 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 lasting reductions for the wealthy and corporations.

Future Solutions

While legislative bodies continue to argue that immigration and poor economic deals 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 "change wealth distribution", including deep changes to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the law really did reflect 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 preventing. It's easier to block than it is to make something substantial take place, but the institutional knowledge is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require ongoing legislative effort.

"It may be before we know it that the balance shifts, 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 solve this. It is solvable."