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To numerous Americans, the economic climate over the last half-decade has been tough. Costs have soared while pay remains flat. Steep mortgage rates have made purchasing property a grim prospect. The jobless rate has been gradually increasing.

Most people have indicated they're delaying major life decisions, including raising children or moving to new employment, because of economic uncertainty. But for a very small group of people, the recent half-decade couldn't have been more successful.

Fortune Expansion

The assets of the world's billionaires grew 54% in 2020, at the height of the pandemic. And even amid all the economic instability, the stock market has only persisted in expanding. This expansion has largely benefited just a limited group of Americans: 10% of the population controls 93% of stock market wealth.

Despite the imbalance as this distribution seems, it's the economic framework working as it is presently configured.

"The wealthy have acquired their jets, they've bought their multiple houses and mansions, but now they're acquiring senators and media outlets," commented economic inequality analyst Chuck Collins. "We're now entering this other chapter of maximum resource removal where the wealthy are exploiting the system of inequality."

Analyzing Income Brackets

To help others understand 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 "Wealthville" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins classifies these "affluence districts" based on income levels:

• At the lowest tier, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an total assets 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 experiences vary dramatically.

"You could be in Lower Richistan, and you're still sitting in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're using 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 shuts down – you're set."

Extreme Affluence Consequences

The summit in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's richest. The control that this group has substantially outweighs those who are simply well-off, let alone the typical citizen who doesn't reside in "Richistan" at all.

But Collins thinks the progressive slogan "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 framework of policies," Collins said. "We should be focused on 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: acquiring fortune, defending the wealth, policy control 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 creating or operating a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires substantial commitment and tactics 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 extensive selection of tools such as legal entities, offshore bank accounts, undisclosed businesses, non-profit organizations and other mechanisms to hold assets," he writes.

Political Influence and Hyper-Extraction

To further a wealth defense strategy, a family needs government backing. Wealth of over $40m translates to political power, Collins says, and can be used to secure fortune and maintain expansion.

The final phase is a different kind of wealth accumulation, one that Collins calls "maximum taking" to describe how the wealthy have come to influence nearly every single part of an Americans' routine activities largely through capital management, which allows wealthy individuals to support private companies.

"Private equity is seeking those sectors of the economy where they can increase profits 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 stored in so few hands, and they can kind of turn around 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 increase their costs."

Actual Impacts

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 oligarchs understand people are being marginalized [and] are monetarily hurting," Collins said, adding that Republicans have been good at accessing a potent "phony populism".

Political Reality

The contradiction, Collins points out in his book, is that political leaders have appointed a series of billionaires to administrative posts. Along with tech billionaires 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 congressional allies, helped pass huge tax bills, which will make enduring decreases for the wealthy and corporations.

Potential Changes

While legislative bodies continue to argue that foreign entry 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 meaningfully address the underlying harms?" Collins said.

Left-leaning officials, he argues, know what policies are needed to "alter economic flow", 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 bulk of people who really want lawmakers to solve some of these urgent problems," Collins said. "Oligarchic power is not about building so much as blocking. It's easier to block than it is to make something meaningful happen, but the institutional knowledge 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 quickly 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 fixable."