“What do we really need to know about how the economy works?” With that opening sentence, Kyla Scanlon clearly defines the ostensible purpose of In This Economy? before attempting over the subsequent twenty lengthy chapters to fulfill that ambitious mission. Adopting an extremely casual and colloquial approach, the author begins with explanations of how fiscal and monetary policy work—including a considerable discussion of the role played by the Federal Reserve—before proceeding to explain such seemingly one-off topics as economic productivity measurement, macro and microeconomic theoretical developments, recessions, the labor market, inflation, wealth inequality, commodities and cryptocurrencies, the housing market, and what money is. The book concludes with a series of essays loosely grouped under a “humans are the economy” theme that come far closer to being pointed social commentary than they do to providing cogent explanations for economic phenomena.
I would really like nothing more than to report that I found this volume to be both charming in its approach and effective in developing its content. Sadly, neither of those two things proved to be true. In fact, the entire book is a bit of a mess that suffers greatly from not having a clear sense of the intended audience; the author vacillates between using simple metaphors to explain complicated topics (e.g., the financial economic system as a childhood game of ‘The Princess and the Kingdom’, the whole ‘vibes are the economy’ trope that recurs endlessly, the Fed as a mountain climber and the labor market as a mountain goat, money as “aged grape piss”) to giving extremely cursory explanations using high-level jargon that are almost certainly beyond the grasp of readers new to the subject (e.g., defining interest rate swaps as contracts “which involve swapping interest rates”, the link between mortgage-backed securities and credit default swaps). Beyond that, the jumbled way in which some topics were introduced as insertions into other unrelated discussions was quite distracting (e.g., the discussion of behavioral economics in a chapter on how the economic productivity and inflation are measured, discussing investment vehicles such as ETFs in a chapter on how financial markets function, describing SPACs in a chapter on cryptocurrencies).
There are two other problems with this volume that are worth noting. First, some of the author’s statements are simply incorrect. For instance, when describing the U.S. dollar “castle” (whatever that is), it is stated: “…a strong U.S. dollar makes Chinese imports more expensive for American consumers and businesses—so Americans buy less stuff from China.” Also, net exports are defined as “…the dollar value of the products we buy from other countries (imports) minus the dollar value of products that other countries buy from us (exports).” The second problem that should be mentioned in this context is that the book contains a lot of inflammatory statements that are unsupported by anything resembling facts or reasoned arguments. Some examples of this include: “Many people have written about how GDP kind of sucks…”, “The debt ceiling is bad. It is simply, objectively bad”, “…inflation is entirely dependent on what people expect to happen!”, “…we risk spiraling into some sort of vibes-based recession as a result of the vibes-based model influencing the vibes-based narrative that influences the vibes-based economy”, “If the supply of one commodity goes bonkers, so does that of all the others”, “Bank managers are stupid and make bad decisions”, and “As with most aspects of finance, there is an element of Ponzinomics in everything having to do with it”.
To be sure, In This Economy? does contain a lot of useful information and the entire attempt to put a new, contemporary spin on a very old set of topics is in itself a worthy effort. However, that effort became undermined by the muddled way in which the discussion swings wildly between explanations of economic topics—which, of course, is the pronounced purpose of the project—and thinly veiled statements promoting a particular social agenda that were not part of the original promise to the reader. Unfortunately, this is not a book that lands on my recommended list.
Daniel R. MacGlashing
