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To numerous US citizens, the economic climate over the recent five-year span has been challenging. Expenses have skyrocketed while wages remains stagnant. Elevated mortgage rates have made purchasing property a dismal prospect. The rate of unemployment has been gradually increasing.

Many Americans have indicated they're postponing major life decisions, including starting a family or switching jobs, because of financial volatility. But for a select few of people, the recent half-decade couldn't have been any better.

The Billionaire Boom

The assets of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even throughout all the market volatility, the stock market has only continued to grow. This growth has largely benefited just a small number of Americans: 10% of the population holds 93% of stock market wealth.

However unequal as this allocation seems, it's the financial structure working as it is presently configured.

"Rich elites have acquired their jets, they've bought their multiple houses and mansions, but now they're acquiring senators and media outlets," stated wealth disparity expert Chuck Collins. "We're now moving into this other chapter of maximum resource removal where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

To help others grasp what exactly it means to be "rich" 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 "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 restricted 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 flying 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."

Extreme Affluence Consequences

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The control that this group has greatly exceeds those who are simply well-off, let alone the ordinary person who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" fails to address the core issue and has a "hint of elimination" to it.

"It's the distinction between individual behaviors and a structure of regulations," Collins said. "We should be worried about 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: acquiring fortune, protecting assets, government influence and hyper-extraction.

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 membership in Affluent Town.

But getting to Billionaireville requires substantial commitment and strategy in those next three steps. Collins describes what he calls the "wealth defense industry": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as trusts, international accounts, undisclosed businesses, charitable foundations and other vehicles 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 becomes political power, Collins says, and can be used to protect assets and maintain expansion.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to affect nearly every single part of an Americans' routine activities largely through investment firms, which allows wealthy individuals to invest in private companies.

"Private equity is seeking those sectors of the economy where they can squeeze things 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 parked in so few hands, and they can basically shift 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."

Actual Impacts

The consequences 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 pain and frustration of this kind of society can lead to deep discontent.

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

Policy Situation

The irony, Collins points out in his book, is that government officials have appointed a series of billionaires to administrative posts. Along with wealthy entrepreneurs 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 congressional allies, helped pass major tax legislation, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While legislative bodies continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the other major party, which has also been influenced by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "alter economic flow", including significant reforms to the tax system, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the legislation really did represent the will of the majority of people who really want lawmakers to solve 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 historical precedent is there. We know what that looks like."

Collins is positive that there can be change, but said it would require ongoing legislative effort.

"It may be before we know it that the balance shifts, and then it really is about preserving a ongoing grassroots effort to make progress on this severe disparity we're living in," he said. "We can fix this. It is addressable."