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Among countless Americans, the economy over the last half-decade has been challenging. Prices have skyrocketed while salaries remains unchanged. High mortgage rates have made buying a home a bleak prospect. The jobless rate has been slowly rising.

The majority of individuals have stated they're postponing major life decisions, including having kids or switching jobs, because of the instability. But for a very small group of people, the last five years couldn't have been more successful.

The Billionaire Boom

The wealth of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even throughout all the market volatility, the stock market has only kept rising. This increase has mostly helped just a tiny percentage of Americans: 10% of the population controls 93% of stock market wealth.

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

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

Analyzing Income Brackets

To help others understand 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 "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins classifies these "affluence districts" 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 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 lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still flying 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 separate reality. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system fails – 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 wealthiest. The power that this group has far surpasses those who are simply wealthy, let alone the ordinary person who doesn't live in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" fails to address the core issue and has a "hint of elimination" to it.

"It's the distinction between personal actions and a framework of policies," Collins commented. "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, defending the wealth, policy control and extreme wealth removal.

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 admission in Affluent Town.

But getting to Billionaireville requires substantial commitment and planning in those next three steps. Collins describes what he calls the "fortune security field": 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 financial instruments, offshore bank accounts, undisclosed businesses, charitable foundations and other methods to hold assets," he details.

Government Power and Extreme Wealth Removal

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 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' routine activities largely through investment firms, which allows wealthy individuals to fund private companies.

"Private equity is seeking those corners of the economy where they can increase profits 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 accumulated 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."

The Real Consequences

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

"The most powerful oligarchs understand people are being left behind [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at tapping into a potent "fake grassroots movement".

Policy Situation

The irony, Collins points out in his book, is that political leaders have appointed a series of billionaires to government roles. Along with affluent innovators who had temporary but significant roles overseeing substantial reductions to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from political partners, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While political parties continue to argue that foreign entry and poor economic deals are the source of everyone's economic problems, "the challenge is: Will the alternative political group, which has also been influenced by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "change wealth distribution", including significant reforms to the tax system, raising the minimum wage and empowering worker groups.

"It was so, so close, and the law really did embody the will of the bulk 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 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 sustained political momentum.

"It may be before we know it that the balance shifts, 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 solvable."