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To numerous US citizens, the economic climate over the recent five-year span has been tough. Expenses have skyrocketed while pay remains stagnant. Steep mortgage rates have made homeownership a dismal prospect. The rate of unemployment has been gradually increasing.

The majority of individuals have indicated they're postponing major life decisions, including raising children or changing careers, because of financial volatility. But for a select few of people, the last five years couldn't have been more successful.

The Billionaire Boom

The assets of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even throughout all the financial uncertainty, the stock market has only continued to grow. 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 distribution seems, it's the economic framework working as it is currently designed.

"Rich elites have bought their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," stated inequality researcher Chuck Collins. "We're now moving into this other chapter of hyper-extraction where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

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, imagined the different levels of wealth as "Richistan" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins organizes 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 net worth of over $1.5m.
• The villages get more restricted 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 traveling in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really separate reality. 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 highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The influence that this group has substantially outweighs those who are simply wealthy, let alone the typical citizen who doesn't live in "Richistan" at all.

But Collins thinks the political catchphrase "abolish billionaires" fails to address the core issue and has a "whiff of exterminism" to it.

"It's the separation between personal actions and a system of rules," Collins said. "We should be focused on an economic system that channels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins divides it 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 limited sum of wealth through starting or running 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 "wealth defense industry": 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 wide variety of tools such as trusts, foreign deposits, anonymous shell companies, philanthropic entities and other methods to hold assets," he writes.

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to secure fortune and maintain expansion.

The last stage 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 fund private companies.

"Private equity is searching for those sectors of the economy where they can squeeze things 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 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."

Tangible Effects

The consequences 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 significant salary growth. And Collins said the suffering and anger of this kind of society can lead to deep discontent.

"The most powerful affluent rulers understand people are being marginalized [and] are economically suffering," Collins said, adding that right-leaning leaders have been good at connecting with a potent "false common-man appeal".

Political Reality

The irony, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with wealthy entrepreneurs 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 government structure, along with help from political partners, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While political parties continue to argue that foreign entry and unfavorable commercial treaties 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.

Left-leaning officials, 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 empowering worker groups.

"It was so, so close, and the legislation really did embody the will of the most of people who really want lawmakers to solve some of these pressing issues," Collins said. "Oligarchic power is not about building so much as stopping. It's easier to block than it is to make something substantial take place, 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 sooner than expected that the tide turns, and then it really is about maintaining a sustained really popular movement to make progress on this profound imbalance we're living in," he said. "We can fix this. It is fixable."