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To numerous individuals in the United States, the economy over the recent five-year span has been difficult. Costs have soared while wages remains stagnant. High mortgage rates have made purchasing property a bleak prospect. The unemployment rate has been gradually increasing.

Most people have stated they're postponing major life decisions, including raising children or moving to new employment, because of financial volatility. But for a select few of people, the past five-year period couldn't have been any better.

Fortune Expansion

The assets of the world's billionaires increased 54% in 2020, at the height of the pandemic. And even amid all the economic instability, the stock market has only persisted in expanding. This expansion has mostly helped just a tiny percentage of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this distribution seems, it's the economic framework working as it is currently designed.

"Affluent individuals have purchased their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," explained inequality researcher Chuck Collins. "We're now moving into this other chapter of maximum resource removal where the wealthy are preying on the system of inequality."

Mapping Economic Classes

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

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

• At the base level, Affluent Town, are the 10 million Americans who have a annual salary of at least $110,000 and an total assets 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 make up 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 separate reality. 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."

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 most affluent. The influence that this group has greatly exceeds those who are simply well-off, let alone the ordinary person who doesn't live in "Richistan" at all.

But Collins thinks the political catchphrase "billionaires shouldn't exist" fails to address the core issue and has a "whiff of exterminism" to it.

"It's the distinction between personal actions and a structure of regulations," Collins commented. "We should be focused on 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 separates it into four parts: acquiring fortune, securing fortune, policy control and maximum resource extraction.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a limited sum of wealth through establishing or managing a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires significant resources and planning 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 calculated about their taxes.

"Wealth defense professionals use a wide variety of tools such as financial instruments, foreign deposits, anonymous shell companies, non-profit organizations and other mechanisms to hold assets," he explains.

Political Influence and Hyper-Extraction

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 final phase is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to influence 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 corners 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 stored 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 results 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 meaningful wage increases. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being excluded [and] are economically suffering," Collins said, adding that conservative politicians have been good at tapping into a potent "fake grassroots movement".

Policy Situation

The paradox, Collins points out in his book, is that government officials have appointed a string of billionaires to government roles. Along with wealthy entrepreneurs who had brief but powerful 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 political partners, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

The Path Forward

While political parties continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the challenge is: 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 "alter economic flow", including significant reforms to the tax system, raising the minimum wage and strengthening unions.

"It was so, so close, and the bill really did reflect the will of the majority of people who really want lawmakers to address some of these critical challenges," Collins said. "Wealthy influence is not about developing so much as blocking. It's easier to block than it is to make something substantial take place, but the historical precedent is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require sustained political momentum.

"It may be quickly that the tide turns, and then it really is about maintaining a continuous public campaign to make progress on this profound imbalance we're living in," he said. "We can solve this. It is solvable."