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For many US citizens, the economy over the last half-decade has been challenging. Costs have soared while pay remains stagnant. High mortgage rates have made purchasing property a grim prospect. The jobless rate has been slowly rising.

Many Americans have reported they're putting off major life decisions, including having kids or switching jobs, because of financial volatility. But for a very small group of people, the last five years couldn't have been more successful.

The Billionaire Boom

The assets of the world's billionaires increased 54% in 2020, at the peak of the pandemic. And even amid all the market volatility, the stock market has only continued to grow. This expansion has primarily advantaged just a limited group of Americans: 10% of the population owns 93% of stock market wealth.

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

"The wealthy have purchased their jets, they've purchased their multiple houses and mansions, but now they're securing senators and media outlets," stated economic inequality analyst Chuck Collins. "We're now entering this other chapter of extreme wealth extraction where the wealthy are taking advantage of the system of inequality."

Mapping Economic Classes

To help others comprehend 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, conceptualized the different levels of wealth as "Richistan" villages: Wealth Borough, 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 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 experiences 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 separate reality. You fly private, you have no stakes in the commercial aviation system. You don't care if the whole system collapses – 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 richest. The influence that this group has far surpasses those who are simply wealthy, let alone the ordinary person who doesn't reside in "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" fails to address the core issue and has a "whiff of exterminism" to it.

"It's the distinction between personal actions and a structure of regulations," Collins commented. "We should be concerned 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 divides it into four parts: acquiring fortune, defending the wealth, government influence and maximum resource extraction.

When many Americans think about wealth, they usually think solely 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 significant resources and tactics in those next three steps. Collins describes what he calls the "fortune security field": 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 trusts, foreign deposits, undisclosed businesses, non-profit organizations and other vehicles to hold assets," he writes.

Government Power and Extreme Wealth Removal

To enhance 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 maintain expansion.

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' daily existence largely through investment firms, which allows wealthy individuals to support private companies.

"Private equity is looking for those corners 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 accumulated 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."

Tangible Effects

The consequences 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 substantial income improvement. And Collins said the pain and frustration of this kind of society can lead to deep discontent.

"The most powerful oligarchs understand people are being left behind [and] are economically suffering," Collins said, adding that Republicans have been good at accessing a potent "false common-man appeal".

Political Reality

The contradiction, Collins points out in his book, is that elected representatives have appointed a series of billionaires to government roles. Along with wealthy entrepreneurs 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 administrative framework, along with help from political partners, helped pass major tax legislation, which will make lasting reductions for the wealthy and corporations.

The Path Forward

While government groups continue to argue that foreign entry and poor economic deals are the source of everyone's economic problems, "the issue remains: Will the other major party, which has also been captured 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 substantial modifications to the tax system, boosting the minimum wage and empowering worker groups.

"It was so, so close, and the legislation really did embody the will of the majority of people who really want lawmakers to fix some of these urgent problems," Collins said. "Elite control is not about developing so much as blocking. 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 hopeful that there can be change, but said it would require ongoing legislative effort.

"It may be before we know it that the pendulum swings back, 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."