In This Economy?

February 26, 2024
The robust debut from former options trader Scanlon provides a refreshingly accessible overview of how the U.S. economy works. Exploring the government’s tools for influencing financial markets, Scanlon explains that the Federal Reserve serves as “an economic vibe setter” that cools or heats up the economy through raising or lowering the “interest rates that depository institutions (including banks) charge each other” for the overnight loans that ensure banks have enough money on hand to meet customers’ demands. Scanlon focuses on helping readers understand pressing economic concerns, as when she notes that the National Bureau of Economic Research consults a variety of data to make an ultimately “pretty subjective” decision about when to declare a recession, and argues that inflation is usually caused by price hikes, tight labor markets, increased globalization, and disruptions in energy markets. Throughout, Scanlon emphasizes the role that “vibes and feelings” play in shaping financial markets, suggesting that such economic indicators as consumer spending depend on actions that stem from countless individuals’ assessments about the state of the economy. Scanlon’s conversational tone provides a welcome alternative to standard stodgy economic explainers, though the overabundance of exclamation marks sometimes irks (“Borrowing money is okay! It really is!”). Still, this is an ideal primer for readers whose eyes glaze over at the mere mention of the debt ceiling.