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To numerous Americans, the economy over the recent five-year span has been challenging. Costs have soared while pay remains unchanged. Elevated mortgage rates have made purchasing property a dismal prospect. The rate of unemployment has been slowly rising.

Most people have reported they're postponing major life decisions, including having kids or changing careers, because of the instability. But for a tiny fraction of people, the recent half-decade couldn't have been more successful.

Fortune Expansion

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 persisted in expanding. This increase has mostly helped just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

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

"Rich elites have acquired 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 moving into this other chapter of maximum resource removal where the wealthy are preying on the system of inequality."

Understanding Wealth Tiers

To help others comprehend 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 "Wealthville" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins categorizes these "affluence districts" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a annual salary 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.

Altogether, 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 traveling in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're traveling via 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 shuts down – you're set."

The Billionaireville Effect

The summit 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 well-off, let alone the ordinary person who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "billionaires shouldn't exist" misses the point and has a "hint of elimination" to it.

"It's the separation between personal actions and a system of rules," Collins said. "We should be focused on an economic system that directs so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins divides it into four parts: getting the wealth, protecting assets, government influence and maximum resource extraction.

When many Americans think about wealth, they usually think solely 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 membership 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 deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, offshore bank accounts, secret corporations, non-profit organizations and other mechanisms to hold assets," he details.

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 protect assets and protect its accumulation.

The last stage 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' daily existence largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is searching for those areas of the economy where they can extract value a little bit harder," Collins said. "One thing I don't think people realize is these billionaire private-equity funds are what happens when so much wealth is accumulated 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 increase their costs."

Actual Impacts

The results 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 meaningful wage increases. And Collins said the hardship and discontent of this kind of society can lead to deep discontent.

"The most powerful wealthy elites understand people are being left behind [and] are economically suffering," Collins said, adding that conservative politicians have been good at accessing a potent "fake grassroots movement".

Government Truth

The paradox, Collins points out in his book, is that government officials have appointed a series of billionaires to cabinet positions. Along with wealthy entrepreneurs who had brief but powerful roles overseeing substantial reductions to the federal workforce, other important roles 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 permanent tax cuts for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the issue remains: 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.

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 law really did represent the will of the bulk of people who really want lawmakers to solve some of these pressing issues," Collins said. "Oligarchic power is not about building so much as preventing. 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 ongoing legislative effort.

"It may be before we know it that the tide turns, and then it really is about maintaining a continuous public campaign to make progress on this severe disparity we're living in," he said. "We can solve this. It is addressable."