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Among countless US citizens, the financial landscape over the past five years has been difficult. Expenses have soared while pay remains flat. Elevated mortgage rates have made buying a home a bleak prospect. The jobless rate has been gradually increasing.

Many Americans have indicated they're putting off major life decisions, including having kids or switching jobs, because of financial volatility. But for a select few of people, the last five years couldn't have been more prosperous.

Fortune Expansion

The wealth of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even during all the market volatility, the stock market has only kept rising. This increase has primarily advantaged just a small number of Americans: 10% of the population owns 93% of stock market wealth.

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

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

Analyzing Income Brackets

To help others understand what exactly it means to be "wealthy" in the US, Collins borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Affluencia" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins organizes these "wealth villages" based on income levels:

• At the foundation, 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 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.

Collectively, the residents of these villages constitute 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 using a private jet. That's a really separate reality. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system fails – 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 power that this group has substantially outweighs those who are simply affluent, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the political catchphrase "end extreme wealth" doesn't capture the real problem and has a "hint of elimination" to it.

"It's the separation between individual behaviors and a structure of regulations," Collins said. "We should be focused on an economic system that channels so much wealth upward to the billionaires."

The Four Pillars of Billionaire Wealth

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: acquiring fortune, defending the wealth, government influence and maximum resource 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 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 "wealth defense industry": the tax lawyers, accountants and wealth managers who use their expertise to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a wide variety of tools such as legal entities, foreign deposits, secret corporations, non-profit organizations and other vehicles to hold assets," he writes.

Political Influence and Hyper-Extraction

To advance a wealth defense strategy, a family needs policy assistance. Wealth of over $40m becomes political power, Collins says, and can be used to secure fortune and protect its accumulation.

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

"Private equity is searching for those sectors of the economy where they can squeeze things 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 generate returns out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

Tangible Effects

The results 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 substantial income improvement. And Collins said the suffering and anger of this kind of society can lead to deep discontent.

"The most powerful affluent rulers understand people are being excluded [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at accessing a potent "false common-man appeal".

Policy Situation

The contradiction, Collins points out in his book, is that political leaders have appointed a series of billionaires to administrative posts. Along with wealthy entrepreneurs who had temporary but significant roles overseeing massive cuts to the federal workforce, other key positions for commerce, treasury, education and the interior are also all billionaires.

This political landscape, along with help from political partners, helped pass significant fiscal policies, which will make enduring decreases for the wealthy and corporations.

Future Solutions

While political parties continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the question becomes: Will the alternative political group, which has also been influenced by the billionaires and big money, be able to effectively tackle the underlying harms?" Collins said.

Liberal leaders, he argues, know what policies are needed to "reverse the updraft of wealth", including deep changes to the tax system, increasing the minimum wage and supporting labor organizations.

"It was so, so close, and the legislation really did reflect the will of the majority of people who really want lawmakers to solve some of these pressing issues," Collins said. "Elite control is not about building so much as preventing. It's easier to block than it is to make something meaningful happen, 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 continuous government action.

"It may be quickly that the tide turns, and then it really is about preserving a sustained really popular movement to make progress on this extreme inequality we're living in," he said. "We can address this. It is fixable."