Economics

Checks and Balance newsletter: Trump’s erstwhile allies

Published

10 months ago

April 2, 2024

This is the introduction to Checks and Balance, a weekly, subscriber-only newsletter bringing exclusive insight from our correspondents in America.

James Bennet, our Lexington columnist, considers the former allies of Donald Trump and their refusal to endorse him

Bill Clinton had his share of scandals, as I wrote in Lexington this week, but he was an effective and popular president, and he left office with an approval rating of 66%, according to Gallup. Barack Obama also left on a high note, at 59%. When the two former presidents appeared with President Joe Biden in New York on March 28th, they were plumping for money for his campaign, but they nevertheless presented a dignified tableau of mutual respect and affection, solidarity and continuity.

What a contrast with Donald Trump. The only other living former Republican president, George W. Bush, has never even endorsed him, let alone embraced him in public. Mr Trump makes a virtue of that, of course. His politics are grounded in the idea he is breaking with everything that came before.

What’s weird, though, is that the discontinuity increasingly applies to his own term in office. His own vice-president, Mike Pence, said in mid-March he will not endorse his former boss—not a huge surprise, since Mr Pence has accused Mr Trump of putting himself “over the constitution”, and yet it is still a shocking repudiation, one without obvious precedent at that level of American politics. It puts Mr Pence on a list of officials who served Mr Trump but have since broken with him that includes an attorney-general (Bill Barr), two defence secretaries (Jim Mattis and Mark Esper), two national security advisers (John Bolton and H.R. McMaster), two chiefs of staff (John Kelly and Mick Mulvaney), a chairman of the joint chiefs of staff (Mark Milley), a secretary of the Navy (Richard Spencer), a secretary of state (Rex Tillerson), a secretary of education (Betsy DeVos), and a secretary of transportation (Elaine Chao), among others.

Maybe some of these people will have a change of heart, though that doesn’t seem probable. (Those Republicans, such as Senator Lindsey Graham, who repudiate their repudiations of Mr Trump tend to still have political ambitions. For that reason Nikki Haley, who was Mr Trump’s most formidable opponent for the Republican nomination, may come around, though she appears to be resisting so far.) Mr Kelly has called Mr Trump “a person with nothing but contempt for our democratic institutions, our constitution, and our rule of law”. Mr Esper has said “his actions are all about him and not about the country.” Mr Bolton has said he thought foreign leaders saw Mr Trump as “a laughing fool”.

It seems to defy not just conventional politics but even common sense that such condemnation and contempt from formidable people who worked closely with Mr Trump does not matter much. At least not so far.

Accounting

Business Transaction Recording For Financial Success

Published

4 hours ago

January 18, 2025

Business Finance News

Business Transaction Recording For Financial Success

In the world of financial management, accurate transaction recording is much more than a routine task—it is the foundation of fiscal integrity, operational transparency, and informed decision-making. By maintaining meticulous records, businesses ensure their financial ecosystem remains robust and reliable. This article explores the essential practices for precise transaction recording and its critical role in driving business success.

The Importance of Detailed Transaction Recording
At the heart of accurate financial management is detailed transaction recording. Each transaction must include not only the monetary amount but also its nature, the parties involved, and the exact date and time. This level of detail creates a comprehensive audit trail that supports financial analysis, regulatory compliance, and future decision-making. Proper documentation also ensures that stakeholders have a clear and trustworthy view of an organization’s financial health.

Establishing a Robust Chart of Accounts
A well-organized chart of accounts is fundamental to accurate transaction recording. This structured framework categorizes financial activities into meaningful groups, enabling businesses to track income, expenses, assets, and liabilities consistently. Regularly reviewing and updating the chart of accounts ensures it stays relevant as the business evolves, allowing for meaningful comparisons and trend analysis over time.

Leveraging Modern Accounting Software
Advanced accounting software has revolutionized how businesses handle transaction recording. These tools automate repetitive tasks like data entry, synchronize transactions in real-time with bank feeds, and perform validation checks to minimize errors. Features such as cloud integration and customizable reports make these platforms invaluable for maintaining accurate, accessible, and up-to-date financial records.

The Power of Double-Entry Bookkeeping
Double-entry bookkeeping remains a cornerstone of precise transaction management. By ensuring every transaction affects at least two accounts, this system inherently checks for errors and maintains balance within the financial records. For example, recording both a debit and a credit ensures that discrepancies are caught early, providing a reliable framework for accurate reporting.

The Role of Timely Documentation
Prompt transaction recording is another critical factor in financial accuracy. Delays in documentation can lead to missing or incorrect entries, which may skew financial reports and complicate decision-making. A culture that prioritizes timely and accurate record-keeping ensures that a company always has real-time insights into its financial position, helping it adapt to changing conditions quickly.

Regular Reconciliation for Financial Integrity
Periodic reconciliations act as a vital checkpoint in transaction recording. Whether conducted daily, weekly, or monthly, these reviews compare recorded transactions with external records, such as bank statements, to identify discrepancies. Early detection of errors ensures that records remain accurate and that the company’s financial statements are trustworthy.

Conclusion
Mastering the art of accurate transaction recording is far more than a compliance requirement—it is a strategic necessity. By implementing detailed recording practices, leveraging advanced technology, and adhering to time-tested principles like double-entry bookkeeping, businesses can ensure financial transparency and operational efficiency. For finance professionals and business leaders, precise transaction recording is the bedrock of informed decision-making, stakeholder confidence, and long-term success.

With these strategies, businesses can build a reliable financial foundation that supports growth, resilience, and the ability to navigate an ever-changing economic landscape.

Economics

A protest against America’s TikTok ban is mired in contradiction

Published

11 hours ago

January 17, 2025

Business Finance News

AS A SHUTDOWN looms, TikTok in America has the air of the last day of school. The Brits are saying goodbye to the Americans. Australians are waiting in the wings to replace banished American influencers. And American users are bidding farewell to their fictional Chinese spies—a joke referencing the American government’s accusation that China is using the app (which is owned by ByteDance, a Chinese tech giant) to surveil American citizens.

Economics

Home insurance costs soar as climate events surge, Treasury Dept. says

Published

1 day ago

January 16, 2025

Business Finance News

Firefighters battle flames during the Eaton Fire in Pasadena, California, U.S., Jan. 7, 2025.

Mario Anzuoni | Reuters

Climate-related natural disasters are driving up insurance costs for homeowners in the most-affected regions, according to a Treasury Department report released Thursday.

In a voluminous study covering 2018-22 and including some data beyond that, the department found that there were 84 disasters costing $1 billion or more, excluding floods, and that they caused a combined $609 billion in damages. Floods are not covered under homeowner policies.

During the period, costs for policies across all categories rose 8.7% faster than the rate of inflation. However, the burden went largely to those living in areas most hit by climate-related events.

For consumers living in the 20% of zip codes with the highest expected annual losses, premiums averaged $2,321, or 82% more than those living in the 20% of lowest-risk zip codes.

“Homeowners insurance is becoming more costly and less accessible for consumers as the costs of climate-related events pose growing challenges to both homeowners and insurers alike,” said Nellie Liang, undersecretary of the Treasury for domestic finance.

The report comes as rescue workers continue to battle raging wildfires in the Los Angeles area. At least 25 people have been killed and 180,000 homeowners have been displaced.

Treasury Secretary Janet Yellen said the costs from the fires are still unknown, but noted that the report reflected an ongoing serious problem. During the period studied, there was nearly double the annual total of disasters declared for climate-related events as in the period of 1960-2010 combined.

“Moreover, this [wildfire disaster] does not stand alone as evidence of this impact, with other climate-related events leading to challenges for Americans in finding affordable insurance coverage – from severe storms in the Great Plans to hurricanes in the Southeast,” Yellen said in a statement. “This report identifies alarming trends of rising costs of insurance, all of which threaten the long-term prosperity of American families.”

Both homeowners and insurers in the most-affected areas were paying in other ways as well.

Nonrenewal rates in the highest-risk areas were about 80% higher than those in less-risky areas, while insurers paid average claims of $24,000 in higher-risk areas compared to $19,000 in lowest-risk regions.

In the Southeast, which includes states such as Florida and Louisiana that frequently are slammed by hurricanes, the claim frequency was 20% higher than the national average.

In the Southwest, which includes California, wildfires tore through 3.3 million acres during the time period, with five events causing more than $100 million in damages. The average loss claim was nearly $27,000, or nearly 50% higher than the national average. Nonrenewal rates for insurance were 23.5% higher than the national average.

The Treasury Department released its findings with just three days left in the current administration. Treasury officials said they hope the administration under President-elect Donald Trump uses the report as a springboard for action.

“We certainly are hopeful that our successors stay focused on this issue and continue to produce important research on this issue and think about important and creative ways to address it,” an official said.