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For many US citizens, the economic climate over the past five years has been difficult. Prices have skyrocketed while wages remains stagnant. Elevated mortgage rates have made homeownership a bleak prospect. The rate of unemployment has been creeping up.

Most people have stated they're postponing major life decisions, including raising children or switching jobs, because of the instability. But for a tiny fraction of people, the last five years couldn't have been more successful.

The Billionaire Boom

The fortune of the world's billionaires increased 54% in 2020, at the peak of the pandemic. And even amid all the financial uncertainty, the stock market has only kept rising. This increase has mostly helped 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 system working as it is currently designed.

"Rich elites have purchased their jets, they've purchased their multiple houses and mansions, but now they're securing senators and media outlets," stated economic inequality analyst Chuck Collins. "We're now entering this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

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, envisioned the different levels of wealth as "Richistan" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins categorizes these "wealth villages" 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 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 comprise the top 10% of the wealth income distribution, about 14 million Americans altogether, though their circumstances 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 using 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 shuts down – you're set."

Ultra-Wealth Impact

The peak 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 far surpasses those who are simply affluent, let alone the ordinary person who doesn't inhabit "Richistan" at all.

But Collins thinks the progressive slogan "abolish billionaires" misses the point and has a "hint of elimination" to it.

"It's the distinction between individual behaviors and a system of rules," Collins said. "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, securing fortune, government influence and extreme wealth removal.

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 starting or running a successful business, which could get them residency in Affluent Town.

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

"Wealth defense professionals use a wide variety of tools such as financial instruments, international accounts, secret corporations, philanthropic entities and other methods to hold assets," he details.

Government Power and Extreme Wealth Removal

To enhance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and maintain expansion.

The last stage is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to affect nearly every single part of an Americans' everyday life 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 extract value 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 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 raise their rents."

The Real Consequences

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 significant salary growth. And Collins said the hardship and discontent of this kind of society can lead to profound dissatisfaction.

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

Government Truth

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 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 government structure, along with help from legislative supporters, helped pass major tax legislation, which will make enduring decreases 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 challenge is: Will the opposing party, which has also been influenced by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "change wealth distribution", including substantial modifications to the tax system, increasing the minimum wage and empowering worker groups.

"It was so, so close, and the bill really did embody the will of the bulk of people who really want lawmakers to address some of these urgent problems," Collins said. "Elite control is not about building so much as blocking. 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 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 sustaining a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can address this. It is solvable."