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To numerous Americans, the economic climate over the last half-decade has been difficult. Expenses have soared while salaries remains flat. Elevated mortgage rates have made homeownership a dismal prospect. The jobless rate has been slowly rising.

Many Americans have reported they're delaying major life decisions, including starting a family or switching jobs, because of economic uncertainty. But for a very small group of people, the recent half-decade couldn't have been more successful.

The Billionaire Boom

The fortune 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 continued to grow. This increase has primarily advantaged just a small number of Americans: 10% of the population holds 93% of stock market wealth.

Despite the imbalance as this distribution seems, it's the economic framework working as it is currently designed.

"The wealthy have acquired their jets, they've acquired their multiple houses and mansions, but now they're acquiring senators and media outlets," explained 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."

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 update 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 family earnings of at least $110,000 and an net worth 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.

Altogether, 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 using a private jet. That's a really distinct lifestyle. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system fails – you're set."

Extreme Affluence Consequences

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The power that this group has substantially outweighs those who are simply well-off, let alone the ordinary person who doesn't inhabit "Richistan" at all.

But Collins thinks the political catchphrase "billionaires shouldn't exist" fails to address the core issue and has a "hint of elimination" to it.

"It's the distinction between individual behaviors and a framework of policies," Collins commented. "We should be concerned about 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 separates it into four parts: accumulating assets, defending the wealth, 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 starting or running a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires substantial commitment and planning 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 financial instruments, foreign deposits, undisclosed businesses, charitable foundations and other vehicles to hold assets," he explains.

Government Power and Extreme Wealth Removal

To further a wealth defense strategy, a family needs policy assistance. Wealth of over $40m translates to political power, Collins says, and can be used to defend wealth 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 affect nearly every single part of an Americans' routine activities largely through private equity, 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 realize is these billionaire private-equity funds are what happens when so much wealth is stored in so few hands, and they can essentially pivot 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."

The Real Consequences

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 substantial income improvement. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

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

Government Truth

The paradox, Collins points out in his book, is that government officials have appointed a succession of billionaires to administrative posts. Along with affluent innovators who had short yet influential roles overseeing substantial reductions 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 congressional allies, helped pass significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that immigration and bad trade agreements 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 seriously confront 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, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did reflect the will of the majority of people who really want lawmakers to address some of these critical challenges," Collins said. "Elite control is not about building so much as blocking. It's easier to block than it is to make something significant occur, but the institutional knowledge 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 sooner than expected that the balance shifts, and then it really is about sustaining a continuous public campaign to make progress on this profound imbalance we're living in," he said. "We can address this. It is addressable."