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Among countless individuals in the United States, the financial landscape over the past five years has been tough. Prices have skyrocketed while wages remains stagnant. Steep mortgage rates have made homeownership a bleak prospect. The rate of unemployment has been creeping up.

Many Americans have stated they're postponing major life decisions, including having kids or moving to new employment, because of the instability. But for a tiny fraction of people, the last five years couldn't have been more successful.

The Billionaire Boom

The wealth of the world's billionaires expanded 54% in 2020, at the peak of the pandemic. And even amid all the economic instability, the stock market has only continued to grow. This growth has largely benefited just a tiny percentage of Americans: 10% of the population holds 93% of stock market wealth.

As uneven as this allocation seems, it's the system working as it is existing today.

"The wealthy have bought their jets, they've acquired their multiple houses and mansions, but now they're acquiring senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now entering this other chapter of maximum resource removal where the wealthy are preying on the system of inequality."

Analyzing Income Brackets

To help others grasp 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, imagined the different levels of wealth as "Richistan" villages: Affluent Town, 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 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 sitting 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 investment in the commercial aviation system. You don't care if the whole system shuts down – you're set."

Extreme Affluence Consequences

The highest hill in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The influence that this group has far surpasses those who are simply affluent, let alone the ordinary person who doesn't live in "Richistan" at all.

But Collins thinks the progressive slogan "end extreme wealth" fails to address the core issue 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 concerned about an economic system that funnels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins divides it 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 reasonable quantity of wealth through establishing or managing 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 knowledge to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as legal entities, foreign deposits, undisclosed businesses, non-profit organizations and other methods to hold assets," he explains.

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 protect its accumulation.

The final phase is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to touch nearly every single part of an Americans' daily existence largely through private equity, which allows wealthy individuals to fund private companies.

"Private equity is seeking 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 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 significant salary growth. And Collins said the pain and frustration of this kind of society can lead to serious unrest.

"The most powerful wealthy elites understand people are being left behind [and] are monetarily hurting," Collins said, adding that right-leaning leaders have been good at accessing a potent "false common-man appeal".

Policy Situation

The irony, Collins points out in his book, is that government officials have appointed a succession of billionaires to administrative posts. Along with tech billionaires who had short yet influential roles overseeing substantial reductions to the federal workforce, other key positions 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 border policies 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 meaningfully address 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 most of people who really want lawmakers to fix some of these critical challenges," Collins said. "Oligarchic power 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 sustained political momentum.

"It may be before we know it that the balance shifts, and then it really is about maintaining a sustained really popular movement to make progress on this severe disparity we're living in," he said. "We can solve this. It is solvable."