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For many US citizens, the financial landscape over the recent five-year span has been challenging. Costs have soared while pay remains flat. Steep mortgage rates have made buying a home a dismal prospect. The unemployment rate has been creeping up.

Many Americans have reported they're delaying major life decisions, including having kids or changing careers, because of the instability. But for a very small group of people, the recent half-decade couldn't have been more successful.

The Billionaire Boom

The wealth of the world's billionaires increased 54% in 2020, at the climax of the pandemic. And even throughout all the market volatility, the stock market has only kept rising. This growth has primarily advantaged just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

However unequal as this distribution seems, it's the system working as it is presently configured.

"Affluent individuals have acquired their jets, they've purchased their multiple houses and mansions, but now they're buying 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 preying on the system of inequality."

Analyzing Income Brackets

To help others comprehend what exactly it means to be "affluent" in the US, Collins adopts a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Wealthville" 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 restricted 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 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 flying 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 shuts down – you're set."

Extreme Affluence Consequences

The highest hill 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 average American who doesn't live in "Richistan" at all.

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

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

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins separates it into four parts: getting the wealth, protecting assets, government influence 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 creating or operating a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires significant resources 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 calculated about their taxes.

"Wealth defense professionals use a wide variety of tools such as legal entities, international accounts, anonymous shell companies, charitable foundations and other vehicles to hold assets," he writes.

Political Influence and Hyper-Extraction

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

The ultimate step is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to influence nearly every single part of an Americans' daily existence largely through investment firms, which allows wealthy individuals to fund private companies.

"Private equity is seeking those areas 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 squeeze money out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can increase their costs."

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 pain and frustration of this kind of society can lead to serious unrest.

"The most powerful wealthy elites understand people are being left behind [and] are economically suffering," Collins said, adding that Republicans have been good at connecting with a potent "phony populism".

Policy Situation

The irony, Collins points out in his book, is that political leaders have appointed a succession of billionaires to government roles. Along with affluent innovators 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 legislative supporters, helped pass major tax legislation, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While government groups continue to argue that border policies and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the other major party, which has also been influenced by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "change wealth distribution", including deep changes to the tax system, raising the minimum wage and strengthening unions.

"It was so, so close, and the law really did represent the will of the majority of people who really want lawmakers to solve 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 optimistic that there can be change, but said it would require ongoing legislative effort.

"It may be before we know it that the tide turns, 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 solve this. It is fixable."