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Among countless Americans, the financial landscape over the past five years has been challenging. Prices have skyrocketed while pay remains unchanged. Steep mortgage rates have made purchasing property a grim prospect. The jobless rate has been gradually increasing.

Many Americans have stated they're postponing major life decisions, including starting a family or changing careers, because of economic uncertainty. But for a tiny fraction of people, the last five years couldn't have been more successful.

The Billionaire Boom

The fortune of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even during all the financial uncertainty, the stock market has only persisted in expanding. This expansion has primarily advantaged just a small number of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this distribution seems, it's the financial structure working as it is existing today.

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

Understanding Wealth Tiers

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, imagined the different levels of wealth as "Affluencia" 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 lowest tier, 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 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.

Altogether, 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 traveling in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really separate reality. 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 peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The control that this group has far surpasses those who are simply affluent, let alone the ordinary person who doesn't live in "Richistan" at all.

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

"It's the difference between individual behaviors and a structure of regulations," 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 breaks it down into four parts: accumulating assets, protecting assets, political capture and hyper-extraction.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a reasonable quantity of wealth through creating or operating a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires serious investment 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 expertise to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, international accounts, anonymous shell companies, charitable foundations and other mechanisms to hold assets," he writes.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs political support. Wealth of over $40m translates to political power, Collins says, and can be used to defend wealth and maintain expansion.

The ultimate step 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 searching for those sectors of the economy where they can extract value 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 accumulated in so few hands, and they can basically shift 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 paying more for their healthcare, rent and vet bills without seeing any significant salary growth. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

"The most powerful oligarchs understand people are being left behind [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at tapping into a potent "false common-man appeal".

Government Truth

The contradiction, Collins points out in his book, is that government officials have appointed a series of billionaires to government roles. Along with wealthy entrepreneurs who had brief but powerful roles overseeing substantial reductions to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from legislative supporters, helped pass significant fiscal policies, which will make enduring decreases for the wealthy and corporations.

Future Solutions

While legislative bodies continue to argue that foreign entry and poor economic deals are the source of everyone's economic problems, "the issue remains: Will the other major party, which has also been controlled by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "change wealth distribution", including significant reforms to the tax system, raising the minimum wage and empowering worker groups.

"It was so, so close, and the law really did represent the will of the most of people who really want lawmakers to fix some of these urgent problems," Collins said. "Oligarchic power is not about creating so much as preventing. It's easier to block than it is to make something significant occur, 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 ongoing legislative effort.

"It may be quickly that the pendulum swings back, and then it really is about sustaining a ongoing grassroots effort to make progress on this profound imbalance we're living in," he said. "We can fix this. It is solvable."