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To numerous US citizens, the financial landscape over the last half-decade has been tough. Expenses have escalated while pay remains stagnant. Steep mortgage rates have made buying a home a dismal prospect. The jobless rate has been gradually increasing.

Many Americans have indicated they're putting off major life decisions, including having kids or moving to new employment, because of economic uncertainty. But for a select few of people, the last five years couldn't have been any better.

The Billionaire Boom

The wealth 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 increase has mostly helped just a small number 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 presently configured.

"Rich elites have bought their jets, they've bought their multiple houses and mansions, but now they're buying senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now moving into this other chapter of maximum resource removal where the wealthy are taking advantage of the system of inequality."

Understanding Wealth Tiers

To help others grasp what exactly it means to be "wealthy" 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 update the concept, Collins organizes these "economic communities" based on income levels:

• At the foundation, 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 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 flying in the coach section of a commercial plane," Collins explained. "Whereas in Upper Richistan, you're using 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 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 most affluent. The control that this group has greatly exceeds those who are simply wealthy, let alone the typical citizen who doesn't inhabit "Richistan" at all.

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

"It's the difference between individual behaviors and a system of rules," Collins said. "We should be concerned about an economic system that directs 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: getting the wealth, protecting assets, political capture 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 residency in Affluent Town.

But getting to Billionaireville requires significant resources and strategy in those next three steps. Collins describes what he calls the "asset protection sector": the tax lawyers, accountants and wealth managers who use their expertise to ensure that the super rich are being deliberate about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, international accounts, undisclosed businesses, philanthropic entities and other methods to hold assets," he writes.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs government backing. Wealth of over $40m becomes political power, Collins says, and can be used to secure fortune and ensure continued growth.

The last stage is a different kind of wealth accumulation, one that Collins calls "hyper extraction" to describe how the wealthy have come to influence nearly every single part of an Americans' daily existence largely through private equity, which allows wealthy individuals to fund 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 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 boost their expenses."

The Real Consequences

The consequences 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 deep discontent.

"The most powerful wealthy elites understand people are being marginalized [and] are economically suffering," Collins said, adding that right-leaning leaders have been good at tapping into a potent "phony populism".

Political Reality

The irony, Collins points out in his book, is that government officials have appointed a string of billionaires to administrative posts. 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 legislative supporters, helped pass significant fiscal policies, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While government groups continue to argue that immigration and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been controlled by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "reverse the updraft of wealth", including significant reforms to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the bill really did represent the will of the bulk of people who really want lawmakers to solve 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 muscle memory is there. We know what that looks like."

Collins is optimistic that there can be change, but said it would require ongoing legislative effort.

"It may be before we know it that the tide turns, and then it really is about maintaining a ongoing grassroots effort to make progress on this severe disparity we're living in," he said. "We can fix this. It is solvable."