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To numerous US citizens, the economic climate over the past five years has been difficult. Costs have soared while wages remains stagnant. Steep mortgage rates have made purchasing property a dismal prospect. The jobless rate has been slowly rising.

Most people have indicated they're postponing major life decisions, including starting a family or changing careers, because of financial volatility. But for a select few of people, the past five-year period couldn't have been any better.

Wealth Explosion

The wealth of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even during all the economic instability, the stock market has only persisted in expanding. This growth has largely benefited just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

However unequal as this allocation seems, it's the system working as it is currently designed.

"Rich elites have purchased their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," explained economic inequality analyst Chuck Collins. "We're now moving into this other chapter of hyper-extraction 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 "Affluencia" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins organizes these "economic communities" based on income levels:

• At the lowest tier, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an overall wealth 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.

In total, 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 flying in a private jet. That's a really distinct lifestyle. 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."

Extreme Affluence Consequences

The peak 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 substantially outweighs those who are simply wealthy, let alone the ordinary person who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "billionaires shouldn't exist" misses the point and has a "suggestion of eradication" to it.

"It's the separation between personal actions and a system of rules," Collins explained. "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: getting the wealth, defending the wealth, political capture and extreme wealth removal.

When many Americans think about wealth, they usually think exclusively 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 admission in Affluent Town.

But getting to Billionaireville requires significant resources and strategy 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 deliberate about their taxes.

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

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs policy assistance. Wealth of over $40m becomes political power, Collins says, and can be used to protect assets and ensure continued growth.

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' everyday life largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is seeking those areas 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 parked 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 boost their expenses."

Actual Impacts

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 suffering and anger of this kind of society can lead to deep discontent.

"The most powerful affluent rulers understand people are being excluded [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at tapping into a potent "phony populism".

Government Truth

The paradox, Collins points out in his book, is that government officials have appointed a series of billionaires to cabinet positions. Along with tech billionaires who had brief but powerful roles overseeing massive cuts to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from legislative supporters, helped pass huge tax bills, which will make enduring decreases for the wealthy and corporations.

The Path Forward

While government groups 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.

Liberal leaders, he argues, know what policies are needed to "change wealth distribution", including significant reforms to the tax system, increasing the minimum wage and strengthening unions.

"It was so, so close, and the legislation really did reflect the will of the majority of people who really want lawmakers to fix some of these pressing issues," Collins said. "Oligarchic power is not about developing so much as stopping. It's easier to block than it is to make something significant occur, but the muscle memory is there. We know what that looks like."

Collins is hopeful that there can be change, but said it would require sustained political momentum.

"It may be sooner than expected that the pendulum swings back, and then it really is about sustaining a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can fix this. It is addressable."