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Among countless Americans, the economy over the recent five-year span has been challenging. Costs have soared while salaries remains stagnant. Elevated mortgage rates have made purchasing property a bleak prospect. The jobless rate has been slowly rising.

The majority of individuals have stated they're delaying major life decisions, including starting a family or changing careers, because of financial volatility. But for a very small group of people, the last five years couldn't have been more prosperous.

Fortune Expansion

The assets of the world's billionaires increased 54% in 2020, at the climax of the pandemic. And even amid all the market volatility, the stock market has only continued to grow. This expansion has mostly helped just a small number of Americans: 10% of the population holds 93% of stock market wealth.

Despite the imbalance as this division seems, it's the financial structure working as it is currently designed.

"The wealthy have purchased their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," stated wealth disparity expert Chuck Collins. "We're now entering this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Mapping Economic Classes

To help others grasp 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, envisioned 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 "economic communities" based on income levels:

• At the foundation, Affluent Town, are the 10 million Americans who have a family earnings 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 circumstances 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 distinct lifestyle. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system collapses – 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 richest. The power that this group has far surpasses those who are simply well-off, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" misses the point and has a "whiff of exterminism" to it.

"It's the separation between personal actions and a structure of regulations," Collins explained. "We should be focused on 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 breaks it down into four parts: accumulating assets, defending the wealth, political capture and maximum resource extraction.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a modest amount of wealth through creating or operating a successful business, which could get them residency 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 skills to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a broad range of tools such as legal entities, foreign deposits, anonymous shell companies, charitable foundations and other methods to hold assets," he writes.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m translates to political power, Collins says, and can be used to protect assets and maintain expansion.

The final phase is a different kind of wealth accumulation, one that Collins calls "maximum taking" 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 looking for those areas 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 parked in so few hands, and they can basically shift 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 increase their costs."

The Real Consequences

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 deep discontent.

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

Government Truth

The irony, Collins points out in his book, is that elected representatives have appointed a succession of billionaires to cabinet positions. Along with tech billionaires 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 significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While government groups continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been controlled by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "reverse the updraft of wealth", including substantial modifications to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did represent the will of the majority of people who really want lawmakers to fix some of these critical challenges," Collins said. "Elite control is not about creating so much as preventing. It's easier to block than it is to make something meaningful happen, 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 continuous government action.

"It may be quickly that the pendulum swings back, and then it really is about preserving a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can address this. It is solvable."