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To numerous individuals in the United States, the financial landscape over the last half-decade has been tough. Costs have escalated while wages remains stagnant. Steep mortgage rates have made homeownership a dismal prospect. The unemployment rate has been gradually increasing.

Most people have stated they're delaying major life decisions, including raising children or switching jobs, because of financial volatility. But for a tiny fraction of people, the last five years couldn't have been more successful.

Fortune Expansion

The assets of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even throughout all the economic instability, the stock market has only persisted in expanding. This expansion has mostly helped just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

As uneven as this distribution seems, it's the system working as it is existing today.

"The wealthy have bought their jets, they've acquired their multiple houses and mansions, but now they're acquiring senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now entering this other chapter of maximum resource removal where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

To help others understand what exactly it means to be "rich" 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 "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins organizes these "affluence districts" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a annual salary 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.

In total, 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 using a private jet. That's a really different cultural experience. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system shuts down – you're set."

The Billionaireville Effect

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

But Collins thinks the political catchphrase "billionaires shouldn't exist" misses the point and has a "whiff of exterminism" to it.

"It's the difference between private conduct and a system of rules," Collins commented. "We should be concerned about an economic system that channels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins divides it into four parts: accumulating assets, protecting assets, political capture 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 substantial commitment 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 skills to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as financial instruments, foreign deposits, undisclosed businesses, charitable foundations and other mechanisms to hold assets," he details.

Political Influence and Hyper-Extraction

To enhance a wealth defense strategy, a family needs political support. Wealth of over $40m becomes political power, Collins says, and can be used to secure fortune and ensure continued growth.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to touch nearly every single part of an Americans' daily existence largely through capital management, which allows wealthy individuals to support private companies.

"Private equity is looking for those sectors 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 accumulated 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 raise their rents."

The Real Consequences

The effects 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 hardship and discontent of this kind of society can lead to deep discontent.

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

Government Truth

The paradox, Collins points out in his book, is that government officials have appointed a succession of billionaires to government roles. Along with affluent innovators who had short yet influential roles overseeing significant decreases 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 political partners, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While political parties continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been influenced 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 "alter economic flow", including significant reforms to the tax system, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the legislation really did embody the will of the bulk of people who really want lawmakers to address some of these urgent problems," Collins said. "Oligarchic power 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 positive 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 sustaining a ongoing grassroots effort to make progress on this extreme inequality we're living in," he said. "We can fix this. It is solvable."