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To numerous Americans, the economy over the past five years has been tough. Prices have escalated while pay remains stagnant. High mortgage rates have made purchasing property a grim prospect. The rate of unemployment has been creeping up.

The majority of individuals have stated they're putting off major life decisions, including starting a family or changing careers, because of economic uncertainty. But for a select few of people, the past five-year period couldn't have been more successful.

The Billionaire Boom

The wealth of the world's billionaires increased 54% in 2020, at the climax of the pandemic. And even amid all the economic instability, the stock market has only kept rising. This expansion has primarily advantaged just a small number of Americans: 10% of the population owns 93% of stock market wealth.

However unequal as this allocation seems, it's the system working as it is existing today.

"Affluent individuals have acquired their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," stated economic inequality analyst Chuck Collins. "We're now moving into this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

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

To update the concept, Collins organizes these "economic communities" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a family earnings 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 constitute 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 noted. "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 shuts down – you're set."

Ultra-Wealth Impact

The peak 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 wealthy, let alone the average American who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" misses the point and has a "whiff of exterminism" to it.

"It's the difference between personal actions and a structure of regulations," Collins said. "We should be concerned about an economic system that channels 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, securing fortune, political capture and extreme wealth removal.

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 starting or running a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires significant resources 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 expertise to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a wide variety of tools such as trusts, international accounts, secret corporations, non-profit organizations and other methods to hold assets," he explains.

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 final phase is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to influence 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 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 understand is these billionaire private-equity funds are what happens when so much wealth is accumulated in so few hands, and they can kind of turn around 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 facing higher costs for their healthcare, rent and vet bills without seeing any significant salary growth. And Collins said the pain and frustration of this kind of society can lead to deep discontent.

"The most powerful oligarchs understand people are being left behind [and] are economically suffering," Collins said, adding that right-leaning leaders have been good at connecting with a potent "phony populism".

Policy Situation

The paradox, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with tech billionaires who had brief but powerful roles overseeing substantial reductions to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from legislative supporters, 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 issue remains: Will the other major party, which has also been captured by the billionaires and big money, be able to meaningfully address 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, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the legislation really did reflect the will of the most of people who really want lawmakers to address some of these pressing issues," Collins said. "Wealthy influence is not about creating so much as preventing. It's easier to block than it is to make something meaningful happen, 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 continuous government action.

"It may be sooner than expected that the tide turns, and then it really is about sustaining a ongoing grassroots effort to make progress on this profound imbalance we're living in," he said. "We can solve this. It is fixable."