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For many individuals in the United States, the economic climate over the last half-decade has been tough. Expenses have soared while salaries remains flat. High mortgage rates have made purchasing property a bleak prospect. The jobless rate has been creeping up.

Many Americans have stated they're putting off major life decisions, including raising children or changing careers, because of financial volatility. But for a very small group of people, the last five years couldn't have been more successful.

Wealth Explosion

The fortune of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even amid all the market volatility, the stock market has only kept rising. This expansion has largely benefited just a small number of Americans: 10% of the population controls 93% of stock market wealth.

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

"Rich elites have bought their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," commented inequality researcher Chuck Collins. "We're now entering this other chapter of maximum resource removal where the wealthy are preying on the system of inequality."

Mapping Economic Classes

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

To modernize the concept, Collins categorizes these "economic communities" based on income levels:

• At the base level, Affluent Town, are the 10 million Americans who have a family earnings 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 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 flying 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 investment in the commercial aviation system. You don't care if the whole system collapses – you're set."

Extreme Affluence Consequences

The peak 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 greatly exceeds those who are simply affluent, let alone the ordinary person who doesn't reside in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" misses the point and has a "whiff of exterminism" to it.

"It's the distinction between private conduct and a structure of regulations," Collins said. "We should be worried about an economic system that directs so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: accumulating assets, protecting assets, government influence and extreme wealth removal.

When many Americans think about wealth, they usually think solely 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 admission in Affluent Town.

But getting to Billionaireville requires significant resources 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 knowledge to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a wide variety of tools such as trusts, foreign deposits, secret corporations, charitable foundations and other vehicles to hold assets," he explains.

Political Influence and Hyper-Extraction

To further 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 ensure continued growth.

The final phase is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to touch nearly every single part of an Americans' everyday life largely through investment firms, which allows wealthy individuals to invest in private companies.

"Private equity is looking for those areas of the economy where they can increase profits 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 accumulated 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."

Tangible Effects

The effects 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 meaningful wage increases. And Collins said the hardship and discontent of this kind of society can lead to profound dissatisfaction.

"The most powerful wealthy elites 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".

Policy Situation

The irony, 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 brief but powerful roles overseeing massive cuts to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

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

The Path Forward

While government groups continue to argue that foreign entry and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the other major party, which has also been captured by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "change wealth distribution", including deep changes to the tax system, raising the minimum wage and strengthening unions.

"It was so, so close, and the law really did represent 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 developing so much as preventing. 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 ongoing legislative effort.

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