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To numerous Americans, the financial landscape over the past five years has been tough. Expenses have skyrocketed while salaries remains stagnant. Elevated mortgage rates have made purchasing property a grim prospect. The jobless rate has been gradually increasing.

Most people have reported they're putting off major life decisions, including starting a family or moving to new employment, because of economic uncertainty. But for a very small group of people, the recent half-decade couldn't have been any better.

Wealth Explosion

The fortune of the world's billionaires grew 54% in 2020, at the peak of the pandemic. And even during all the market volatility, the stock market has only kept rising. This growth has mostly helped just a small number of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the system working as it is presently configured.

"The wealthy have acquired their jets, they've purchased their multiple houses and mansions, but now they're acquiring senators and media outlets," commented wealth disparity expert Chuck Collins. "We're now stepping into this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

To help others comprehend 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 "Wealthville" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update the concept, Collins categorizes these "wealth villages" 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 overall wealth 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.

Collectively, 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 sitting in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're traveling via a private jet. That's a really distinct lifestyle. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system collapses – 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 far surpasses those who are simply affluent, let alone the ordinary person who doesn't reside in "Richistan" at all.

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

"It's the distinction between personal actions and a framework of policies," Collins commented. "We should be focused on 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, securing fortune, policy control 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 residency in Affluent Town.

But getting to Billionaireville requires serious investment and tactics 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, offshore bank accounts, anonymous shell companies, non-profit organizations and other vehicles to hold assets," he details.

Political Influence and Hyper-Extraction

To further a wealth defense strategy, a family needs government backing. Wealth of over $40m converts to political power, Collins says, and can be used to protect assets and protect its accumulation.

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

"Private equity is searching for 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 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 boost their expenses."

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 significant salary growth. And Collins said the suffering and anger of this kind of society can lead to serious unrest.

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

Policy Situation

The paradox, Collins points out in his book, is that government officials have appointed a string of billionaires to cabinet positions. Along with tech billionaires who had short yet influential roles overseeing significant decreases to the federal workforce, other important roles 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.

Potential Changes

While political parties continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the question becomes: 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 substantial modifications to the tax system, increasing the minimum wage and strengthening unions.

"It was so, so close, and the law really did reflect the will of the most of people who really want lawmakers to solve some of these pressing issues," Collins said. "Wealthy influence is not about developing so much as blocking. It's easier to block than it is to make something substantial take place, 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 sustained political momentum.

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