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For many Americans, the economy over the last half-decade has been challenging. Prices have soared while salaries remains unchanged. Steep mortgage rates have made purchasing property a bleak prospect. The rate of unemployment has been slowly rising.

The majority of individuals have stated they're postponing major life decisions, including raising children or moving to new employment, because of economic uncertainty. But for a tiny fraction of people, the last five years couldn't have been more prosperous.

Fortune Expansion

The fortune of the world's billionaires expanded 54% in 2020, at the height of the pandemic. And even amid all the economic instability, the stock market has only kept rising. This expansion has primarily advantaged just a tiny percentage of Americans: 10% of the population owns 93% of stock market wealth.

As uneven as this division seems, it's the financial structure working as it is existing today.

"Rich elites have bought their jets, they've bought their multiple houses and mansions, but now they're acquiring senators and media outlets," explained wealth disparity expert Chuck Collins. "We're now stepping into this other chapter of hyper-extraction where the wealthy are exploiting the system of inequality."

Understanding Wealth Tiers

To help others understand what exactly it means to be "rich" in the US, Collins adopts a concept from journalist Robert Frank who, in a 2007 book on the rich, conceptualized the different levels of wealth as "Richistan" villages: Prosperity Village, Lower Richistan, Middle Richistan, Upper Richistan and Billionaireville.

To contemporize the concept, Collins organizes these "economic communities" based on income levels:

• At the base level, Affluent Town, are the 10 million Americans who have a household income of at least $110,000 and an net worth 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 make up the top 10% of the wealth income distribution, about 14 million Americans altogether, though their circumstances 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 traveling via a private jet. That's a really separate reality. 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 peak in "Richistan" is Billionaireville, which is made up of about 800 American billionaires who are some of the world's wealthiest. The control that this group has greatly exceeds those who are simply wealthy, let alone the average American who doesn't inhabit "Richistan" at all.

But Collins thinks the activist mantra "end extreme wealth" fails to address the core issue and has a "whiff of exterminism" to it.

"It's the separation between private conduct and a structure of regulations," Collins commented. "We should be worried about an economic system that channels 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, protecting assets, political capture and extreme wealth removal.

When many Americans think about wealth, they usually think solely about the first step, Collins said. People can create a modest amount of wealth through creating or operating a successful business, which could get them residency in Affluent Town.

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

"Wealth defense professionals use a wide variety of tools such as trusts, offshore bank accounts, undisclosed businesses, philanthropic entities and other methods to hold assets," he writes.

Government Power and Extreme Wealth Removal

To advance a wealth defense strategy, a family needs political support. Wealth of over $40m translates 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 "extreme removal" to describe how the wealthy have come to affect nearly every single part of an Americans' everyday life largely through capital management, which allows wealthy individuals to fund private companies.

"Private equity is searching for those corners 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 parked in so few hands, and they can kind of turn around and say, 'Where else can we extract profits out of the economy?' Healthcare? Great. Mobile home parks? These people can't go anywhere, [so] you can boost their expenses."

The Real Consequences

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 meaningful wage increases. 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 excluded [and] are financially struggling," Collins said, adding that conservative politicians have been good at tapping into a potent "false common-man appeal".

Political Reality

The paradox, Collins points out in his book, is that political leaders have appointed a succession of billionaires to cabinet positions. Along with tech billionaires who had brief but powerful roles overseeing massive cuts 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 congressional allies, helped pass huge tax bills, which will make permanent tax cuts for the wealthy and corporations.

Future Solutions

While political parties continue to argue that foreign entry and bad trade agreements are the source of everyone's economic problems, "the question becomes: Will the opposing party, which has also been controlled 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 deep changes to the tax system, boosting the minimum wage and strengthening unions.

"It was so, so close, and the law really did reflect the will of the most of people who really want lawmakers to solve some of these urgent problems," Collins said. "Wealthy influence is not about creating so much as preventing. 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 ongoing legislative effort.

"It may be quickly that the pendulum swings back, and then it really is about preserving a continuous public campaign to make progress on this severe disparity we're living in," he said. "We can solve this. It is fixable."