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For many Americans, the economy over the last half-decade has been tough. Costs have escalated while salaries remains unchanged. High mortgage rates have made buying a home a bleak prospect. The jobless rate has been creeping up.

Most people have stated they're putting off major life decisions, including raising children or moving to new employment, because of the instability. But for a select few of people, the recent half-decade couldn't have been more prosperous.

Wealth Explosion

The assets of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even during all the market volatility, 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.

As uneven as this division seems, it's the economic framework working as it is presently configured.

"Affluent individuals have purchased their jets, they've bought their multiple houses and mansions, but now they're acquiring senators and media outlets," commented wealth disparity expert Chuck Collins. "We're now stepping into this other chapter of hyper-extraction 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 borrows a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Richistan" villages: Affluent Town, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

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

• At the lowest tier, Affluent Town, are the 10 million Americans who have a family earnings of at least $110,000 and an total assets of over $1.5m.
• The villages get more select 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 make up 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 sitting in the coach section of a commercial plane," Collins said. "Whereas in Upper Richistan, you're flying in 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."

Ultra-Wealth Impact

The summit 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 greatly exceeds those who are simply affluent, let alone the average American who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" misses the point and has a "suggestion of eradication" to it.

"It's the distinction 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 breaks it down into four parts: acquiring fortune, securing fortune, political capture and maximum resource extraction.

When many Americans think about wealth, they usually think solely 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 admission in Affluent Town.

But getting to Billionaireville requires substantial commitment and strategy in those next three steps. Collins describes what he calls the "fortune security field": the tax lawyers, accountants and wealth managers who use their knowledge to ensure that the super rich are being strategic about their taxes.

"Wealth defense professionals use a wide variety of tools such as financial instruments, international accounts, undisclosed businesses, charitable foundations and other vehicles to hold assets," he writes.

Political Influence and Hyper-Extraction

To further a wealth defense strategy, a family needs political support. Wealth of over $40m converts to political power, Collins says, and can be used to defend wealth 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' daily existence largely through capital management, which allows wealthy individuals to invest in private companies.

"Private equity is looking for those corners 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 stored in so few hands, and they can kind of turn around 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 increase their costs."

The Real Consequences

The effects 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 pain and frustration of this kind of society can lead to serious unrest.

"The most powerful affluent rulers understand people are being excluded [and] are monetarily hurting," Collins said, adding that Republicans have been good at tapping into a potent "phony populism".

Political Reality

The paradox, Collins points out in his book, is that government officials have appointed a succession of billionaires to cabinet positions. 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 congressional allies, helped pass huge tax bills, which will make lasting reductions for the wealthy and corporations.

Potential Changes

While government groups continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the challenge is: Will the opposing party, which has also been captured by the billionaires and big money, be able to seriously confront 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 legislation really did reflect the will of the majority of people who really want lawmakers to address some of these pressing issues," Collins said. "Wealthy influence is not about building so much as stopping. It's easier to block than it is to make something substantial take place, but the muscle memory 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 maintaining a continuous public campaign to make progress on this extreme inequality we're living in," he said. "We can solve this. It is addressable."