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To numerous Americans, the economic climate over the past five years has been tough. Costs have skyrocketed while wages remains stagnant. Elevated mortgage rates have made purchasing property a grim prospect. The rate of unemployment has been gradually increasing.

Many Americans have stated they're putting off major life decisions, including raising children or changing careers, because of financial volatility. But for a very small group of people, the past five-year period couldn't have been more prosperous.

The Billionaire Boom

The assets of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even during all the financial uncertainty, the stock market has only continued to grow. This expansion has mostly helped just a limited group of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this division seems, it's the economic framework working as it is presently configured.

"Affluent individuals have purchased their jets, they've bought their multiple houses and mansions, but now they're securing senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now entering this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

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

To modernize the concept, Collins organizes these "affluence districts" 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 total assets of over $1.5m.
• The villages get more select 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 comprise 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 explained. "Whereas in Upper Richistan, you're flying in a private jet. That's a really different cultural experience. 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."

Ultra-Wealth Impact

The peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The power that this group has far surpasses those who are simply wealthy, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" doesn't capture the real problem and has a "hint of elimination" to it.

"It's the difference between personal actions and a structure of regulations," Collins commented. "We should be worried 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 separates it into four parts: getting the wealth, defending the wealth, government influence and maximum resource extraction.

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 establishing or managing a successful business, which could get them residency in Affluent Town.

But getting to Billionaireville requires substantial commitment and strategy in those next three steps. Collins describes what he calls the "fortune security field": the tax lawyers, accountants and wealth managers who use their knowledge to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, offshore bank accounts, secret corporations, charitable foundations and other mechanisms to hold assets," he details.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m converts 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' routine activities largely through investment firms, which allows wealthy individuals to fund private companies.

"Private equity is searching for those areas 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 stored in so few hands, and they can essentially pivot 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 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 significant salary growth. And Collins said the pain and frustration of this kind of society can lead to deep discontent.

"The most powerful wealthy elites understand people are being excluded [and] are monetarily hurting," Collins said, adding that right-leaning leaders have been good at tapping into a potent "false common-man appeal".

Government Truth

The paradox, Collins points out in his book, is that elected representatives have appointed a series of billionaires to administrative posts. Along with wealthy entrepreneurs who had temporary but significant roles overseeing substantial reductions to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from congressional allies, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While government groups continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the issue remains: Will the alternative political group, which has also been captured by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Progressive politicians, 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 law really did reflect the will of the bulk of people who really want lawmakers to solve some of these urgent problems," Collins said. "Elite control is not about developing so much as blocking. It's easier to block than it is to make something significant occur, 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 continuous government action.

"It may be sooner than expected that the balance shifts, and then it really is about sustaining a ongoing grassroots effort to make progress on this severe disparity we're living in," he said. "We can address this. It is addressable."