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Among countless Americans, the economic climate over the last half-decade has been tough. Costs have escalated while wages remains stagnant. Elevated mortgage rates have made purchasing property a bleak prospect. The rate of unemployment has been gradually increasing.

Most people have stated they're delaying major life decisions, including starting a family or moving to new employment, because of financial volatility. But for a very small group of people, the recent half-decade couldn't have been more prosperous.

Fortune Expansion

The wealth of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even amid all the economic instability, the stock market has only continued to grow. This expansion has largely benefited just a limited group of Americans: 10% of the population controls 93% of stock market wealth.

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

"Rich elites have acquired their jets, they've bought their multiple houses and mansions, but now they're securing senators and media outlets," commented wealth disparity expert Chuck Collins. "We're now moving into this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

To help others comprehend 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 "Affluencia" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins categorizes these "economic communities" 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 total assets of over $1.5m.
• The villages get more exclusive 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 experiences vary dramatically.

"You could be in Lower Richistan, and you're still traveling in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're flying in 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."

The Billionaireville Effect

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

But Collins thinks the progressive slogan "billionaires shouldn't exist" fails to address the core issue and has a "suggestion of eradication" to it.

"It's the distinction between personal actions and a framework of policies," Collins commented. "We should be focused on an economic system that funnels so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: getting the wealth, securing fortune, government influence and hyper-extraction.

When many Americans think about wealth, they usually think exclusively 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 substantial commitment and planning in those next three steps. Collins describes what he calls the "fortune security field": the tax lawyers, accountants and wealth managers who use their skills 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, non-profit organizations and other vehicles to hold assets," he writes.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs government backing. Wealth of over $40m translates to political power, Collins says, and can be used to defend wealth and protect its accumulation.

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

"Private equity is looking for those sectors of the economy where they can extract value 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 parked in so few hands, and they can kind of turn around 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."

The Real Consequences

The effects 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 suffering and anger of this kind of society can lead to profound dissatisfaction.

"The most powerful wealthy elites understand people are being left behind [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at accessing a potent "phony populism".

Policy Situation

The irony, Collins points out in his book, is that elected representatives have appointed a series of billionaires to cabinet positions. Along with wealthy entrepreneurs who had brief but powerful 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 congressional allies, helped pass significant fiscal policies, which will make enduring decreases for the wealthy and corporations.

The Path Forward

While political parties continue to argue that immigration and bad trade agreements 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 "reverse the updraft of wealth", including deep changes to the tax system, increasing the minimum wage and strengthening unions.

"It was so, so close, and the bill really did represent the will of the bulk of people who really want lawmakers to solve some of these critical challenges," Collins said. "Elite control is not about creating so much as stopping. 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 quickly that the tide turns, and then it really is about sustaining a sustained really popular movement to make progress on this extreme inequality we're living in," he said. "We can fix this. It is addressable."