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Among countless Americans, the economic climate over the last half-decade has been tough. Costs have soared while pay remains stagnant. Elevated mortgage rates have made homeownership a grim prospect. The unemployment rate has been slowly rising.

Many Americans have reported they're delaying major life decisions, including raising children or changing careers, because of financial volatility. But for a tiny fraction of people, the past five-year period couldn't have been more prosperous.

Fortune Expansion

The fortune of the world's billionaires grew 54% in 2020, at the climax of the pandemic. And even during all the financial uncertainty, the stock market has only continued to grow. This growth has primarily advantaged just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this distribution seems, it's the system working as it is currently designed.

"The wealthy have bought their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," explained economic inequality analyst Chuck Collins. "We're now moving into this other chapter of extreme wealth extraction where the wealthy are preying on the system of inequality."

Analyzing Income Brackets

To help others comprehend 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: 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 lowest tier, Affluent Town, are the 10 million Americans who have a household income 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.

Collectively, the residents of these villages make up 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 sitting in the coach section of a commercial plane," Collins said. "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 summit 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 substantially outweighs those who are simply wealthy, let alone the ordinary person who doesn't live in "Richistan" at all.

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

"It's the difference between individual behaviors and a structure of regulations," Collins explained. "We should be worried about an economic system that directs 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: getting the wealth, defending the wealth, government influence and extreme wealth removal.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a limited sum of wealth through starting or running a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires substantial commitment and tactics in those next three steps. Collins describes what he calls the "fortune security field": 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 broad range of tools such as trusts, foreign deposits, undisclosed businesses, philanthropic entities and other methods to hold assets," he details.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and ensure continued growth.

The final phase is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to influence nearly every single part of an Americans' routine activities largely through capital management, which allows wealthy individuals to support private companies.

"Private equity is searching for those sectors of the economy where they can increase profits 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 stored in so few hands, and they can essentially pivot 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 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 meaningful wage increases. And Collins said the suffering and anger of this kind of society can lead to serious unrest.

"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 accessing a potent "fake grassroots movement".

Government Truth

The contradiction, Collins points out in his book, is that elected representatives have appointed a series of billionaires to administrative posts. Along with affluent innovators who had temporary but significant roles overseeing substantial reductions to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

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

Future Solutions

While political parties continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been captured 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 "alter economic flow", including significant reforms to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the bill 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 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 tide turns, 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 addressable."