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To numerous Americans, the economy over the last half-decade has been challenging. Expenses have soared while wages remains stagnant. Steep mortgage rates have made purchasing property a bleak prospect. The rate of unemployment has been slowly rising.

The majority of individuals have stated they're postponing major life decisions, including raising children or moving to new employment, because of the instability. But for a very small group of people, the recent half-decade couldn't have been more prosperous.

The Billionaire Boom

The assets of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even amid all the financial uncertainty, the stock market has only persisted in expanding. This growth has primarily advantaged just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this allocation seems, it's the economic framework working as it is currently designed.

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

Understanding Wealth Tiers

To help others understand what exactly it means to be "rich" in the US, Collins adopts a concept from journalist Robert Frank who, in a 2007 book on the rich, imagined the different levels of wealth as "Affluencia" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update 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 family earnings of at least $110,000 and an net worth 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 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 said. "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 fails – you're set."

Ultra-Wealth Impact

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 wealthy, let alone the ordinary person who doesn't inhabit "Richistan" at all.

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

"It's the separation between individual behaviors and a system of rules," Collins commented. "We should be concerned about an economic system that funnels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: getting the wealth, securing fortune, political capture and hyper-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 establishing or managing a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires substantial commitment and strategy 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 strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, foreign deposits, secret corporations, philanthropic entities and other mechanisms to hold assets," he writes.

Political Influence and Hyper-Extraction

To advance 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 ensure continued growth.

The final phase is a different kind of wealth accumulation, one that Collins calls "maximum taking" 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 fund private companies.

"Private equity is searching for those corners of the economy where they can extract value a little bit harder," Collins said. "One thing I don't think people comprehend is these billionaire private-equity funds are what happens when so much wealth is stored in so few hands, and they can essentially pivot 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."

The Real Consequences

The results 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 deep discontent.

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

Political Reality

The paradox, Collins points out in his book, is that political leaders have appointed a series of billionaires to administrative posts. Along with wealthy entrepreneurs who had temporary but significant roles overseeing significant decreases to the federal workforce, other important roles 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 enduring decreases for the wealthy and corporations.

The Path Forward

While government groups continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the opposing party, which has also been captured by the billionaires and big money, be able to seriously confront 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 bill really did embody the will of the bulk of people who really want lawmakers to address 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 positive that there can be change, but said it would require ongoing legislative effort.

"It may be before we know it that the balance shifts, and then it really is about maintaining a sustained really popular movement to make progress on this extreme inequality we're living in," he said. "We can address this. It is fixable."