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For many individuals in the United States, the financial landscape over the past five years has been difficult. Expenses have escalated while salaries remains unchanged. Steep mortgage rates have made buying a home a dismal prospect. The jobless rate has been gradually increasing.

Many Americans have reported they're postponing major life decisions, including raising children or moving to new employment, because of the instability. But for a very small group of people, the last five years 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 throughout all the economic instability, the stock market has only kept rising. This increase has largely benefited just a limited group of Americans: 10% of the population controls 93% of stock market wealth.

As uneven as this division seems, it's the financial structure working as it is presently configured.

"The wealthy have acquired their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," explained economic inequality analyst Chuck Collins. "We're now moving into this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

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

To update 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 family earnings of at least $110,000 and an net worth 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 comprise 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 flying in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're using a private jet. That's a really distinct lifestyle. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system collapses – you're set."

The Billionaireville Effect

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The influence that this group has far surpasses those who are simply wealthy, let alone the typical citizen who doesn't inhabit "Richistan" at all.

But Collins thinks the progressive slogan "billionaires shouldn't exist" misses the point and has a "whiff of exterminism" to it.

"It's the difference between individual behaviors and a framework of policies," Collins explained. "We should be concerned about 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 breaks it down into four parts: acquiring fortune, defending the wealth, policy control and maximum resource extraction.

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 residency in Affluent Town.

But getting to Billionaireville requires significant resources and planning in those next three steps. Collins describes what he calls the "wealth defense industry": the tax lawyers, accountants and wealth managers who use their knowledge to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as trusts, offshore bank accounts, secret corporations, charitable foundations and other vehicles to hold assets," he writes.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs political support. Wealth of over $40m converts to political power, Collins says, and can be used to defend wealth and maintain expansion.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to touch nearly every single part of an Americans' everyday life largely through private equity, which allows wealthy individuals to invest in private companies.

"Private equity is looking for those corners of the economy where they can squeeze things 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 basically shift 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 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 suffering and anger 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 conservative politicians have been good at connecting with a potent "fake grassroots movement".

Political Reality

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 temporary but significant roles overseeing massive cuts 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 major tax legislation, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While legislative bodies continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the issue remains: Will the other major party, which has also been influenced by the billionaires and big money, be able to effectively tackle 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, raising the minimum wage and strengthening unions.

"It was so, so close, and the bill really did embody the will of the majority 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 significant occur, but the historical precedent is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require sustained political momentum.

"It may be before we know it that the tide turns, 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 fix this. It is solvable."