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Among countless individuals in the United States, the financial landscape over the last half-decade has been difficult. Prices have escalated while wages remains flat. Elevated mortgage rates have made homeownership a dismal prospect. The jobless rate has been gradually increasing.

The majority of individuals have reported they're delaying major life decisions, including starting a family or switching jobs, because of financial volatility. But for a tiny fraction of people, the recent half-decade couldn't have been more prosperous.

Wealth Explosion

The fortune of the world's billionaires grew 54% in 2020, at the climax of the pandemic. And even amid all the financial uncertainty, the stock market has only kept rising. This increase has largely benefited just a limited group of Americans: 10% of the population holds 93% of stock market wealth.

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

"Rich elites 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 entering this other chapter of maximum resource removal where the wealthy are preying on the system of inequality."

Understanding Wealth Tiers

To help others comprehend 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 "Richistan" villages: Wealth Borough, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To modernize the concept, Collins classifies 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 net worth 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 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 using a private jet. That's a really different cultural experience. You fly private, you have no interest in the commercial aviation system. You don't care if the whole system collapses – 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 wealthiest. The power that this group has substantially outweighs those who are simply affluent, let alone the ordinary person who doesn't reside in "Richistan" at all.

But Collins thinks the progressive slogan "billionaires shouldn't exist" misses the point and has a "suggestion of eradication" to it.

"It's the distinction between individual behaviors and a structure of regulations," Collins commented. "We should be focused on 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 separates it into four parts: acquiring fortune, securing fortune, government influence and extreme wealth removal.

When many Americans think about wealth, they usually think only 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 residency in Affluent Town.

But getting to Billionaireville requires substantial commitment 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 broad range of tools such as financial instruments, foreign deposits, undisclosed businesses, non-profit organizations and other vehicles 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 converts to political power, Collins says, and can be used to protect assets and ensure continued growth.

The last stage 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' routine activities largely through investment firms, which allows wealthy individuals to invest in private companies.

"Private equity is searching for those areas of the economy where they can squeeze things 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 parked 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 raise their rents."

Actual Impacts

The results of this inequality go beyond the wealth getting wealthier. It's about people spending additional funds for their healthcare, rent and vet bills without seeing any meaningful wage increases. And Collins said the hardship and discontent of this kind of society can lead to serious unrest.

"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 connecting with a potent "false common-man appeal".

Policy Situation

The paradox, Collins points out in his book, is that political leaders have appointed a string of billionaires to government roles. Along with affluent innovators who had short yet influential roles overseeing significant decreases to the federal workforce, other important roles for commerce, treasury, education and the interior are also all billionaires.

This government structure, along with help from legislative supporters, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

Future Solutions

While government groups continue to argue that immigration and bad trade agreements are the source of everyone's economic problems, "the challenge is: Will the other major party, which has also been controlled by the billionaires and big money, be able to meaningfully address the underlying harms?" Collins said.

Progressive politicians, he argues, know what policies are needed to "alter economic flow", including deep changes to the tax system, boosting the minimum wage and supporting labor organizations.

"It was so, so close, and the bill really did embody the will of the most of people who really want lawmakers to address some of these critical challenges," Collins said. "Wealthy influence is not about building so much as preventing. It's easier to block than it is to make something significant occur, 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 sustained political momentum.

"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 extreme inequality we're living in," he said. "We can fix this. It is solvable."