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To numerous US citizens, the economy over the past five years has been challenging. Prices have skyrocketed while salaries remains stagnant. Steep mortgage rates have made purchasing property a bleak prospect. The unemployment rate has been creeping up.

The majority of individuals have stated they're postponing major life decisions, including having kids or switching jobs, because of economic uncertainty. But for a very small group of people, the last five years couldn't have been any better.

Wealth Explosion

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

Despite the imbalance as this allocation seems, it's the financial structure working as it is presently configured.

"Rich elites have purchased their jets, they've bought their multiple houses and mansions, but now they're securing senators and media outlets," stated inequality researcher 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 understand what exactly it means to be "affluent" 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: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins classifies these "economic communities" 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.

In total, the residents of these villages make up the top 10% of the wealth income distribution, about 14 million Americans altogether, though their lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still sitting 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 separate reality. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system collapses – you're set."

Extreme Affluence Consequences

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 greatly exceeds those who are simply affluent, let alone the ordinary person who doesn't inhabit "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" misses the point and has a "hint of elimination" to it.

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

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins separates it into four parts: acquiring fortune, protecting assets, government influence 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 starting or running a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires significant resources and tactics in those next three steps. Collins describes what he calls the "fortune security field": 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 broad range of tools such as financial instruments, foreign deposits, secret corporations, charitable foundations and other vehicles to hold assets," he writes.

Government Power and Extreme Wealth Removal

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

The final phase is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to affect nearly every single part of an Americans' daily existence largely through private equity, 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 extract profits out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

Tangible Effects

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

"The most powerful wealthy elites understand people are being marginalized [and] are financially struggling," Collins said, adding that Republicans have been good at tapping into a potent "fake grassroots movement".

Political Reality

The paradox, 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 political landscape, along with help from congressional allies, helped pass major tax legislation, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While political parties continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: Will the opposing party, 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 bill really did embody the will of the most of people who really want lawmakers to address some of these urgent problems," Collins said. "Elite control is not about building so much as stopping. It's easier to block than it is to make something substantial take place, but the institutional knowledge 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 quickly that the balance shifts, and then it really is about maintaining a ongoing grassroots effort to make progress on this profound imbalance we're living in," he said. "We can address this. It is solvable."