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For many Americans, the financial landscape over the past five years has been challenging. Expenses have escalated while salaries remains unchanged. Elevated mortgage rates have made buying a home a grim prospect. The rate of unemployment has been slowly rising.

The majority of individuals have indicated they're delaying major life decisions, including having kids or switching jobs, because of economic uncertainty. But for a select few of people, the last five years couldn't have been any better.

Wealth Explosion

The wealth of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even throughout all the economic instability, the stock market has only persisted in expanding. This growth has mostly helped just a limited group 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.

"Affluent individuals have purchased their jets, they've purchased their multiple houses and mansions, but now they're securing senators and media outlets," commented inequality researcher Chuck Collins. "We're now stepping into this other chapter of maximum resource removal where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

To help others grasp what exactly it means to be "wealthy" in the US, Collins adopts 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 modernize the concept, Collins organizes 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 total assets 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 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 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 stakes in the commercial aviation system. You don't care if the whole system fails – you're set."

The Billionaireville Effect

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The influence that this group has greatly exceeds those who are simply affluent, let alone the average American who doesn't live in "Richistan" at all.

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

"It's the difference between personal actions and a system of rules," Collins said. "We should be worried about an economic system that directs so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins divides it into four parts: getting the wealth, defending the wealth, policy control and maximum resource 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 admission in Affluent Town.

But getting to Billionaireville requires substantial commitment 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 skills to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as financial instruments, offshore bank accounts, secret corporations, non-profit organizations and other vehicles to hold assets," he explains.

Political Influence and Hyper-Extraction

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

The last stage is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to influence nearly every single part of an Americans' everyday life largely through investment firms, which allows wealthy individuals to support private companies.

"Private equity is looking for those areas of the economy where they can squeeze things 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 generate returns out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can raise their rents."

Tangible Effects

The consequences of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds 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 deep discontent.

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

Political Reality

The irony, Collins points out in his book, is that government officials have appointed a succession of billionaires to cabinet positions. Along with wealthy entrepreneurs who had brief but powerful roles overseeing massive cuts 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 congressional allies, helped pass significant fiscal policies, which will make permanent tax cuts for the wealthy and corporations.

The Path Forward

While legislative bodies continue to argue that border policies and poor economic deals are the source of everyone's economic problems, "the issue remains: Will the alternative political group, which has also been influenced by the billionaires and big money, be able to meaningfully address 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 bill really did embody the will of the bulk of people who really want lawmakers to fix some of these pressing issues," Collins said. "Elite control is not about creating so much as preventing. 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 hopeful that there can be change, but said it would require ongoing legislative effort.

"It may be sooner than expected that the tide turns, and then it really is about sustaining a continuous public campaign to make progress on this extreme inequality we're living in," he said. "We can address this. It is solvable."