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To numerous individuals in the United States, the economy over the last half-decade has been challenging. Expenses have escalated while salaries remains unchanged. Elevated mortgage rates have made homeownership a grim prospect. The unemployment rate has been creeping up.

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

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 persisted in expanding. This increase has primarily advantaged just a tiny percentage of Americans: 10% of the population controls 93% of stock market wealth.

As uneven as this allocation seems, it's the system working as it is presently configured.

"The wealthy have acquired their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," commented economic inequality analyst 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 understand what exactly it means to be "wealthy" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, imagined the different levels of wealth as "Richistan" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

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

• At the base level, Affluent Town, are the 10 million Americans who have a household income 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.

Collectively, the residents of these villages constitute 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 said. "Whereas in Upper Richistan, you're traveling via 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 collapses – you're set."

Ultra-Wealth Impact

The summit 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 greatly exceeds those who are simply wealthy, let alone the ordinary person who doesn't live in "Richistan" at all.

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

"It's the difference between private conduct and a framework of policies," Collins commented. "We should be concerned about an economic system that directs so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins divides it into four parts: getting the wealth, defending the wealth, policy control 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 creating or operating a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires significant resources 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 strategic about their taxes.

"Wealth defense professionals use a extensive selection of tools such as legal entities, foreign deposits, undisclosed businesses, charitable foundations and other methods to hold assets," he details.

Government Power and Extreme Wealth Removal

To enhance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m translates to political power, Collins says, and can be used to defend wealth and maintain expansion.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to touch nearly every single part of an Americans' daily existence largely through investment firms, which allows wealthy individuals to support private companies.

"Private equity is looking for those sectors of the economy where they can extract value 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 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 effects 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 significant salary growth. 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 marginalized [and] are financially struggling," Collins said, adding that Republicans 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 succession of billionaires to cabinet positions. Along with affluent innovators who had temporary but significant roles overseeing significant decreases 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 congressional allies, helped pass major tax legislation, which will make lasting reductions for the wealthy and corporations.

The Path Forward

While political parties continue to argue that foreign entry and poor economic deals 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.

Left-leaning officials, he argues, know what policies are needed to "reverse the updraft of wealth", including significant reforms to the tax system, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the law really did reflect the will of the bulk of people who really want lawmakers to solve some of these urgent problems," Collins said. "Oligarchic power is not about creating so much as blocking. It's easier to block than it is to make something significant occur, but the muscle memory is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require continuous government action.

"It may be before we know it that the pendulum swings back, and then it really is about sustaining a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is addressable."