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For many Americans, the economic climate over the recent five-year span has been difficult. Costs have soared while pay remains stagnant. High mortgage rates have made purchasing property a bleak prospect. The jobless rate has been gradually increasing.

Most people have reported they're postponing major life decisions, including having kids or changing careers, because of the instability. But for a very small group of people, the past five-year period couldn't have been more successful.

Wealth Explosion

The wealth of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even amid all the market volatility, the stock market has only persisted in expanding. This growth has mostly helped just a small number of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this division seems, it's the economic framework working as it is presently configured.

"Rich elites have acquired their jets, they've bought their multiple houses and mansions, but now they're securing senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are preying on the system of inequality."

Analyzing Income Brackets

To help others grasp 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, conceptualized the different levels of wealth as "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins organizes these "wealth villages" based on income levels:

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

Altogether, 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 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 distinct lifestyle. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system collapses – 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 wealthiest. The control that this group has substantially outweighs those who are simply wealthy, let alone the average American who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" fails to address the core issue and has a "whiff of exterminism" to it.

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

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins separates it into four parts: getting the wealth, defending the wealth, political capture and maximum resource extraction.

When many Americans think about wealth, they usually think only about the first step, Collins said. People can create a limited sum 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 planning 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 deliberate about their taxes.

"Wealth defense professionals use a broad range of tools such as trusts, international accounts, undisclosed businesses, non-profit organizations and other vehicles to hold assets," he writes.

Political Influence and Hyper-Extraction

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

The last stage 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' everyday life largely through capital management, which allows wealthy individuals to invest in private companies.

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

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 substantial income improvement. And Collins said the suffering and anger of this kind of society can lead to serious unrest.

"The most powerful oligarchs understand people are being marginalized [and] are monetarily hurting," Collins said, adding that conservative politicians have been good at accessing a potent "phony populism".

Political Reality

The paradox, Collins points out in his book, is that government officials have appointed a succession of billionaires to administrative posts. Along with affluent innovators who had brief but powerful roles overseeing significant decreases 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 lasting reductions for the wealthy and corporations.

Future Solutions

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

Left-leaning officials, he argues, know what policies are needed to "change wealth distribution", including substantial modifications to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the law really did represent the will of the bulk of people who really want lawmakers to fix some of these pressing issues," Collins said. "Wealthy influence 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 ongoing legislative effort.

"It may be before we know it 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 address this. It is solvable."