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Among countless US citizens, the financial landscape over the past five years has been challenging. Prices have soared while wages remains flat. Steep mortgage rates have made purchasing property a grim prospect. The jobless rate has been slowly rising.

The majority of individuals have reported they're postponing major life decisions, including starting a family or switching jobs, because of financial volatility. But for a very small group of people, the past five-year period couldn't have been more prosperous.

Wealth Explosion

The wealth of the world's billionaires expanded 54% in 2020, at the climax of the pandemic. And even during all the economic instability, the stock market has only kept rising. This growth has mostly helped just a small number of Americans: 10% of the population owns 93% of stock market wealth.

Despite the imbalance as this division seems, it's the financial structure working as it is currently designed.

"Rich elites have purchased their jets, they've acquired their multiple houses and mansions, but now they're securing senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now moving into this other chapter of extreme wealth extraction where the wealthy are preying on the system of inequality."

Understanding Wealth Tiers

To help others understand 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, imagined the different levels of wealth as "Richistan" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To update 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 lifestyles vary dramatically.

"You could be in Lower Richistan, and you're still flying in the coach section of a commercial plane," Collins noted. "Whereas in Upper Richistan, you're using a private jet. That's a really different cultural experience. You fly private, you have no investment in the commercial aviation system. You don't care if the whole system shuts down – 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 control that this group has greatly exceeds those who are simply affluent, let alone the average American who doesn't live in "Richistan" at all.

But Collins thinks the progressive slogan "end extreme wealth" misses the point and has a "whiff of exterminism" to it.

"It's the distinction between individual behaviors and a framework of policies," Collins said. "We should be worried about an economic system that channels so much wealth upward to the billionaires."

Wealth Accumulation Mechanisms

To understand how wealth at the billionaire level works, Collins breaks it down into four parts: acquiring fortune, 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 reasonable quantity of wealth through creating or operating a successful business, which could get them membership in Affluent Town.

But getting to Billionaireville requires serious investment 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 skills to ensure that the super rich are being calculated about their taxes.

"Wealth defense professionals use a extensive selection of tools such as trusts, foreign deposits, secret corporations, charitable foundations and other methods to hold assets," he details.

Political Influence and Hyper-Extraction

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 maintain expansion.

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

"Private equity is looking for those areas 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 parked 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."

Tangible Effects

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 hardship and discontent of this kind of society can lead to deep discontent.

"The most powerful wealthy elites understand people are being marginalized [and] are economically suffering," Collins said, adding that right-leaning leaders have been good at accessing a potent "false common-man appeal".

Political Reality

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

This government structure, along with help from political partners, helped pass major tax legislation, which will make permanent tax cuts for the wealthy and corporations.

Future Solutions

While government groups continue to argue that immigration and unfavorable commercial treaties are the source of everyone's economic problems, "the question becomes: Will the opposing party, which has also been captured 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 significant reforms to the tax system, raising 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 solve some of these urgent problems," Collins said. "Elite control is not about developing so much as stopping. It's easier to block than it is to make something substantial take place, 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 sustained political momentum.

"It may be quickly that the tide turns, and then it really is about sustaining a ongoing grassroots effort to make progress on this extreme inequality we're living in," he said. "We can solve this. It is solvable."