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Among countless individuals in the United States, the economy over the past five years has been tough. Costs have soared while salaries remains stagnant. Steep mortgage rates have made buying a home a bleak prospect. The unemployment rate has been creeping up.

The majority of individuals have stated they're postponing major life decisions, including having kids or changing careers, because of the instability. But for a tiny fraction of people, the past five-year period couldn't have been more prosperous.

Wealth Explosion

The wealth of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even amid all the market volatility, the stock market has only persisted in expanding. This growth has mostly helped just a tiny percentage of Americans: 10% of the population holds 93% of stock market wealth.

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

"Rich elites have purchased their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now moving into this other chapter of maximum resource removal where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

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

To contemporize the concept, Collins classifies these "wealth villages" based on income levels:

• At the base level, 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 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.

Altogether, 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 traveling in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really separate reality. You fly private, you have no investment 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 wealthiest. The influence that this group has greatly exceeds those who are simply wealthy, let alone the typical citizen who doesn't inhabit "Richistan" at all.

But Collins thinks the progressive slogan "abolish billionaires" doesn't capture the real problem and has a "hint of elimination" to it.

"It's the distinction between individual behaviors and a structure of regulations," Collins explained. "We should be focused on an economic system that funnels 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: getting the wealth, defending the wealth, political capture and maximum resource extraction.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a modest amount of wealth through creating or operating a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires serious investment and tactics in those next three steps. Collins describes what he calls the "wealth defense industry": the tax lawyers, accountants and wealth managers who use their expertise to ensure that the super rich are being calculated 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 writes.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs political support. Wealth of over $40m becomes political power, Collins says, and can be used to secure fortune and protect its accumulation.

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' routine activities largely through private equity, which allows wealthy individuals to invest in private companies.

"Private equity is seeking those areas 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 kind of turn around 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 boost their expenses."

Tangible Effects

The effects of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds for their healthcare, rent and vet bills without seeing any meaningful wage increases. And Collins said the pain and frustration of this kind of society can lead to serious unrest.

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

Political Reality

The contradiction, Collins points out in his book, is that government officials have appointed a series of billionaires to administrative posts. Along with affluent innovators 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 political landscape, along with help from congressional allies, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While legislative bodies 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 seriously confront the underlying harms?" Collins said.

Left-leaning officials, 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 legislation really did embody the will of the majority of people who really want lawmakers to address some of these pressing issues," Collins said. "Wealthy influence is not about creating so much as stopping. It's easier to block than it is to make something significant occur, but the muscle memory is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require continuous government action.

"It may be sooner than expected that the pendulum swings back, and then it really is about maintaining a continuous public campaign to make progress on this profound imbalance we're living in," he said. "We can address this. It is fixable."