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To numerous US citizens, the financial landscape over the past five years has been difficult. Costs have soared while wages remains stagnant. Steep mortgage rates have made homeownership a grim prospect. The unemployment rate has been gradually increasing.

Many Americans have reported they're delaying major life decisions, including starting a family or moving to new employment, because of financial volatility. But for a tiny fraction of people, the recent half-decade couldn't have been more prosperous.

Wealth Explosion

The assets of the world's billionaires grew 54% in 2020, at the height 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 small number of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this allocation seems, it's the economic framework working as it is existing today.

"Affluent individuals have purchased their jets, they've purchased their multiple houses and mansions, but now they're buying senators and media outlets," explained economic inequality analyst Chuck Collins. "We're now moving into this other chapter of extreme wealth extraction where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

To help others understand what exactly it means to be "wealthy" in the US, Collins utilizes a concept from journalist Robert Frank who, in a 2007 book on the rich, envisioned the different levels of wealth as "Affluencia" villages: Wealth Borough, 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 family earnings 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.

Collectively, the residents of these villages comprise 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 flying in a private jet. That's a really different cultural experience. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system fails – you're set."

The Billionaireville Effect

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The control that this group has substantially outweighs 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" doesn't capture the real problem and has a "whiff of exterminism" to it.

"It's the distinction between individual behaviors and a framework of policies," Collins explained. "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 divides it into four parts: accumulating assets, defending the wealth, political capture and maximum resource extraction.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a modest amount 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 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 skills to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, offshore bank accounts, anonymous shell companies, non-profit organizations and other vehicles 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 defend wealth and ensure continued growth.

The ultimate step is a different kind of wealth accumulation, one that Collins calls "extreme removal" to describe how the wealthy have come to influence nearly every single part of an Americans' everyday life largely through private equity, which allows wealthy individuals to support private companies.

"Private equity is searching for those corners of the economy where they can increase profits a little bit harder," Collins said. "One thing I don't think people comprehend 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 extract profits 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 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 profound dissatisfaction.

"The most powerful oligarchs understand people are being left behind [and] are financially struggling," Collins said, adding that right-leaning leaders 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 string of billionaires to cabinet positions. Along with affluent innovators who had brief but powerful roles overseeing significant decreases to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from political partners, helped pass major tax legislation, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that border policies and unfavorable commercial treaties are the source of everyone's economic problems, "the issue remains: Will the other major party, which has also been influenced by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "reverse the updraft of wealth", including deep changes to the tax system, raising the minimum wage and empowering worker groups.

"It was so, so close, and the bill really did embody the will of the majority of people who really want lawmakers to address some of these critical challenges," Collins said. "Oligarchic power is not about building so much as stopping. It's easier to block than it is to make something substantial take place, but the muscle memory is there. We know what that looks like."

Collins is positive 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 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."