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Among countless US citizens, the economic climate over the last half-decade has been challenging. Expenses have soared while salaries remains flat. High mortgage rates have made homeownership a bleak prospect. The rate of unemployment has been slowly rising.

The majority of individuals have reported they're postponing major life decisions, including having kids or changing careers, because of economic uncertainty. But for a tiny fraction of people, the last five years couldn't have been any better.

Fortune Expansion

The assets of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even amid all the market volatility, the stock market has only persisted in expanding. 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 allocation seems, it's the economic framework working as it is presently configured.

"The wealthy have acquired their jets, they've acquired their multiple houses and mansions, but now they're acquiring senators and media outlets," stated inequality researcher Chuck Collins. "We're now moving into this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Understanding Wealth Tiers

To help others grasp 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, imagined the different levels of wealth as "Affluencia" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins classifies these "affluence districts" 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 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 lifestyles 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 traveling via a private jet. That's a really distinct lifestyle. 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 most affluent. The power that this group has far surpasses those who are simply well-off, let alone the typical citizen who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "abolish billionaires" misses the point and has a "suggestion of eradication" to it.

"It's the difference between personal actions and a system of rules," Collins explained. "We should be concerned about an economic system that funnels so much wealth upward to the billionaires."

Fortune Building Strategies

To understand how wealth at the billionaire level works, Collins separates it into four parts: accumulating assets, protecting assets, policy control and hyper-extraction.

When many Americans think about wealth, they usually think exclusively about the first step, Collins said. People can create a limited sum of wealth through establishing or managing a successful business, which could get them admission in Affluent Town.

But getting to Billionaireville requires serious investment and planning in those next three steps. Collins describes what he calls the "fortune security field": 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 wide variety of tools such as legal entities, foreign deposits, anonymous shell companies, non-profit organizations and other mechanisms to hold assets," he explains.

Government Power and Extreme Wealth Removal

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

The ultimate step 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' everyday life largely through investment firms, which allows wealthy individuals to invest in private companies.

"Private equity is seeking 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 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 boost their expenses."

Actual Impacts

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 significant salary growth. And Collins said the pain and frustration of this kind of society can lead to profound dissatisfaction.

"The most powerful wealthy elites understand people are being left behind [and] are financially struggling," Collins said, adding that right-leaning leaders have been good at tapping into a potent "fake grassroots movement".

Political Reality

The contradiction, Collins points out in his book, is that government officials have appointed a succession of billionaires to government roles. Along with wealthy entrepreneurs who had brief but powerful roles overseeing significant decreases to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This administrative framework, along with help from legislative supporters, helped pass major tax legislation, which will make enduring decreases for the wealthy and corporations.

Future Solutions

While government groups continue to argue that border policies and poor economic deals are the source of everyone's economic problems, "the question becomes: Will the other major party, which has also been captured by the billionaires and big money, be able to seriously confront the underlying harms?" Collins said.

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

"It was so, so close, and the bill really did reflect the will of the majority of people who really want lawmakers to fix some of these urgent problems," Collins said. "Oligarchic power is not about creating so much as stopping. 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 optimistic 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 fix this. It is addressable."