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To numerous Americans, the economic climate over the recent five-year span has been tough. Prices have soared while pay remains stagnant. Elevated mortgage rates have made buying a home a bleak prospect. The rate of unemployment has been slowly rising.

Most people have reported they're postponing major life decisions, including raising children or switching jobs, because of the instability. But for a select few of people, the recent half-decade couldn't have been more prosperous.

Wealth Explosion

The fortune of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even during all the economic instability, the stock market has only continued to grow. This increase has primarily advantaged 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 economic framework working as it is existing today.

"Rich elites have bought their jets, they've purchased their multiple houses and mansions, but now they're securing senators and media outlets," explained inequality researcher Chuck Collins. "We're now entering this other chapter of extreme wealth extraction 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 "Richistan" villages: Affluent Town, 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 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.

In total, the residents of these villages make up 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 sitting 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 different cultural experience. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system fails – you're set."

Extreme Affluence Consequences

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 substantially outweighs those who are simply well-off, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "billionaires shouldn't exist" fails to address the core issue and has a "hint of elimination" to it.

"It's the separation between private conduct and a system of rules," Collins explained. "We should be focused on an economic system that directs 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, protecting assets, policy control and maximum resource 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 creating or operating a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires serious investment 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 skills to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a extensive selection of tools such as legal entities, offshore bank accounts, undisclosed businesses, philanthropic entities and other vehicles to hold assets," he details.

Political Influence and Hyper-Extraction

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 secure fortune and ensure continued growth.

The final phase is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to affect nearly every single part of an Americans' everyday life largely through investment firms, which allows wealthy individuals to invest in private companies.

"Private equity is seeking those areas 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 kind of turn around and say, 'Where else can we squeeze money 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 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 deep discontent.

"The most powerful affluent rulers understand people are being marginalized [and] are monetarily hurting," Collins said, adding that Republicans have been good at accessing a potent "false common-man appeal".

Policy Situation

The irony, Collins points out in his book, is that government officials have appointed a succession of billionaires to cabinet positions. Along with wealthy entrepreneurs who had temporary but significant roles overseeing substantial reductions 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 political parties continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been captured 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 empowering worker groups.

"It was so, so close, and the legislation really did reflect the will of the majority of people who really want lawmakers to fix some of these critical challenges," Collins said. "Oligarchic power is not about creating so much as preventing. It's easier to block than it is to make something substantial take place, 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 sooner than expected that the tide turns, and then it really is about maintaining a ongoing grassroots effort to make progress on this severe disparity we're living in," he said. "We can solve this. It is addressable."