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To numerous US citizens, the financial landscape over the past five years has been challenging. Prices have soared while wages remains stagnant. Steep mortgage rates have made buying a home a dismal prospect. The jobless rate has been slowly rising.

The majority of individuals have stated they're postponing major life decisions, including having kids or switching jobs, because of financial volatility. But for a very small group of people, the recent half-decade couldn't have been more prosperous.

Wealth Explosion

The fortune of the world's billionaires increased 54% in 2020, at the climax of the pandemic. And even throughout all the economic instability, the stock market has only kept rising. This growth has primarily advantaged just a tiny percentage 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 existing today.

"Affluent individuals have purchased their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now entering this other chapter of hyper-extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

To help others understand what exactly it means to be "affluent" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Richistan" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

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

• At the base level, Affluent Town, are the 10 million Americans who have a annual salary of at least $110,000 and an net worth 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 circumstances vary dramatically.

"You could be in Lower Richistan, and you're still traveling in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're using a private jet. That's a really different cultural experience. 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."

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 most affluent. 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 political catchphrase "end extreme wealth" misses the point and has a "whiff of exterminism" to it.

"It's the distinction between private conduct and a system of rules," Collins said. "We should be worried about an economic system that funnels 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, securing fortune, government influence and hyper-extraction.

When many Americans think about wealth, they usually think only 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 substantial commitment and tactics in those next three steps. Collins describes what he calls the "asset protection sector": the tax lawyers, accountants and wealth managers who use their skills to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a broad range of tools such as trusts, offshore bank accounts, anonymous shell companies, non-profit organizations and other mechanisms to hold assets," he writes.

Government Power and Extreme Wealth Removal

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

The last stage 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 investment firms, which allows wealthy individuals to support private companies.

"Private equity is looking for those areas of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people realize is these billionaire private-equity funds are what happens when so much wealth is stored 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 raise their rents."

Actual Impacts

The effects of this inequality go beyond the wealth getting wealthier. It's about people facing higher costs 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 serious unrest.

"The most powerful affluent rulers understand people are being excluded [and] are monetarily hurting," Collins said, adding that right-leaning leaders have been good at tapping into a potent "fake grassroots movement".

Policy Situation

The paradox, Collins points out in his book, is that political leaders have appointed a series of billionaires to administrative posts. Along with affluent innovators who had brief but powerful 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 political partners, helped pass major tax legislation, which will make enduring decreases for the wealthy and corporations.

The Path Forward

While government groups continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: 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.

Liberal leaders, he argues, know what policies are needed to "reverse the updraft of wealth", including significant reforms to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the legislation really did reflect the will of the most of people who really want lawmakers to fix some of these pressing issues," Collins said. "Elite control is not about creating so much as blocking. It's easier to block than it is to make something meaningful happen, 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 quickly that the tide turns, and then it really is about sustaining a continuous public campaign to make progress on this severe disparity we're living in," he said. "We can address this. It is addressable."