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To numerous US citizens, the financial landscape over the recent five-year span has been difficult. Expenses have skyrocketed while pay remains unchanged. Elevated mortgage rates have made homeownership a bleak prospect. The unemployment rate has been gradually increasing.

The majority of individuals have indicated they're putting off major life decisions, including raising children or moving to new employment, because of financial volatility. But for a very small group of people, the last five years couldn't have been more successful.

The Billionaire Boom

The fortune of the world's billionaires grew 54% in 2020, at the peak of the pandemic. And even during all the economic instability, the stock market has only kept rising. This expansion has primarily advantaged just a limited group of Americans: 10% of the population controls 93% of stock market wealth.

However unequal as this division seems, it's the system working as it is currently designed.

"The wealthy have purchased their jets, they've acquired their multiple houses and mansions, but now they're buying senators and media outlets," commented wealth disparity expert Chuck Collins. "We're now entering this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

To help others comprehend what exactly it means to be "rich" 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 "Affluencia" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

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

• At the lowest tier, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an overall wealth 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.

Collectively, 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 traveling 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 different cultural experience. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system fails – you're set."

The Billionaireville Effect

The peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The power that this group has greatly exceeds those who are simply affluent, let alone the typical citizen who doesn't live in "Richistan" at all.

But Collins thinks the progressive slogan "billionaires shouldn't exist" doesn't capture the real problem and has a "whiff of exterminism" to it.

"It's the separation between personal actions and a framework of policies," Collins explained. "We should be focused on 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 divides it into four parts: accumulating assets, securing fortune, political capture and hyper-extraction.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a reasonable quantity of wealth through creating or operating 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 "asset protection sector": 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, foreign deposits, undisclosed businesses, philanthropic entities and other vehicles to hold assets," he details.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs government backing. Wealth of over $40m translates to political power, Collins says, and can be used to protect assets 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 touch nearly every single part of an Americans' everyday life 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 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 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 raise their rents."

Actual Impacts

The results 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 meaningful wage increases. And Collins said the suffering and anger of this kind of society can lead to deep discontent.

"The most powerful oligarchs understand people are being marginalized [and] are financially struggling," Collins said, adding that conservative politicians have been good at accessing a potent "false common-man appeal".

Government Truth

The irony, Collins points out in his book, is that government officials have appointed a string of billionaires to government roles. Along with tech billionaires who had brief but powerful roles overseeing massive cuts 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 permanent tax cuts for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that border policies and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the opposing party, which has also been captured 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 "alter economic flow", including deep changes to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did embody the will of the majority of people who really want lawmakers to address 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 institutional knowledge is there. We know what that looks like."

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

"It may be before we know it that the tide turns, and then it really is about maintaining a ongoing grassroots effort to make progress on this severe disparity we're living in," he said. "We can address this. It is solvable."