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To numerous US citizens, the economic climate over the recent five-year span has been difficult. Prices have skyrocketed while pay remains unchanged. Steep mortgage rates have made homeownership a bleak prospect. The jobless rate has been gradually increasing.

Most people have stated they're putting off major life decisions, including starting a family or changing careers, because of financial volatility. But for a select few of people, the recent half-decade couldn't have been more prosperous.

The Billionaire Boom

The wealth of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even throughout all the market volatility, the stock market has only continued to grow. This increase has primarily advantaged just a limited group of Americans: 10% of the population controls 93% of stock market wealth.

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

"The wealthy have acquired their jets, they've acquired 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 preying on the system of inequality."

Understanding Wealth Tiers

To help others understand what exactly it means to be "rich" in the US, Collins adopts a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Wealthville" 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 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 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 constitute 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 separate reality. 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 peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's most affluent. The influence that this group has substantially outweighs those who are simply wealthy, let alone the average American who doesn't live in "Richistan" at all.

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

"It's the distinction 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."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins divides it into four parts: acquiring fortune, protecting assets, 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 modest amount of wealth through establishing or managing a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires significant resources and planning in those next three steps. Collins describes what he calls the "asset protection sector": 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 broad range of tools such as financial instruments, international accounts, anonymous shell companies, philanthropic entities and other methods to hold assets," he explains.

Political Influence and Hyper-Extraction

To further a wealth defense strategy, a family needs government backing. Wealth of over $40m converts 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 "maximum taking" 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 invest in private companies.

"Private equity is looking for those sectors of the economy where they can squeeze things 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 essentially pivot 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 boost their expenses."

Actual Impacts

The effects 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 meaningful wage increases. And Collins said the hardship and discontent of this kind of society can lead to profound dissatisfaction.

"The most powerful wealthy elites understand people are being marginalized [and] are economically suffering," Collins said, adding that conservative politicians 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 string of billionaires to government roles. Along with tech billionaires who had short yet influential roles overseeing massive cuts to the federal workforce, other crucial appointments for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from legislative supporters, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

Future Solutions

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 opposing party, which has also been influenced 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 "alter economic flow", including deep changes to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the legislation really did embody the will of the bulk of people who really want lawmakers to solve some of these pressing issues," 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 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 balance shifts, and then it really is about preserving a sustained really popular movement to make progress on this profound imbalance we're living in," he said. "We can address this. It is addressable."