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The US Supreme Court is primed to recalibrate government power

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TWO WEEKS before America’s Supreme Court considers whether Donald Trump may constitutionally remain on the presidential ballot, it will tackle a question closely tied to Mr Trump’s deregulatory plans for a second term. The power of some 436 federal agencies that do the bulk of the work of the federal government—from food safety to banking rules to pollution control—comes under the justices’ scrutiny on January 17th.

Herring—a silvery fish of the North Atlantic that can be smoked, pickled or, when young, tinned—is the unlikely star of Loper Bright Enterprises v Raimondo and Relentless v Department of Commerce. Both cases involve herring fishermen upset with the National Marine Fisheries Service (NMFS), a federal agency charged with safeguarding America’s ocean resources and habitat.

Drawing on a line in a statute giving the agency licence to make regulations that are “necessary and appropriate…to prevent overfishing and rebuild overfished stocks”, in 2020 the NMFS required fishermen to bring an observer along with them on their boats—and to pay that person’s per-diem fee themselves. Space on these vessels is a “scarce and precious resource”, the fisheries’ lawyer argues, making the NMFS’s rule (which was suspended in April 2023) an “enormous imposition”. Making the fishermen foot the bill “adds insult to injury”.

The rule nevertheless found receptive audiences at two of America’s appellate courts. In allowing the agency to impose the regulation, three-judge panels on both courts turned to a Supreme Court decision, Chevron USA v Natural Resources Defence Council, that has managed the inter-branch balance of power since 1984.

Chevron has two steps. First, judges determine if a law governing an administrative agency speaks clearly. If it does, judges interpret it themselves and tell the agencies what the law means. But if judges believe the law is ambiguous, they give bureaucrats the benefit of the doubt. At this second step, if the court sees the agency’s interpretation as reasonable—even if it is not the interpretation the court thinks best—it defers to the agency. In Loper Bright and Relentless, the circuit courts concluded that the law in question is ambiguous and that the NMFS’s interpretation of it is reasonable.

Chevron was popular among conservative justices in its early days. Five years after it was decided, Antonin Scalia (an arch-conservative justice who died in 2016) gave a lecture at Duke Law School in which he predicted that agency deference would endure as it “reflects the reality of government” and “serves its needs”. Yet two justices on the court today—Neil Gorsuch and Clarence Thomas—have made clear their deep disdain for what has become known as “Chevron deference”.

In a 2015 case involving the Environmental Protection Agency, Justice Thomas wrote that the wide berth Chevron afforded bureaucrats meant the court was “blithely giving the force of law” to “agency ‘interpretations’ of federal statutes” (note the scare quotes) and thereby straying “further and further from the constitution”. For Justice Gorsuch, who was railing against Chevron when he was still a judge on the 10th circuit court of appeals, agency deference is akin to “judicial abdication”.

The plaintiffs in Loper Bright and Relentless are banking on at least three more justices keen on reining in the administrative state. It may be a good bet. Brett Kavanaugh, two years before he became a justice, raised critical questions about Chevron in an article in the Harvard Law Review. The conservative majority has not invoked Chevron since 2016. The plaintiffs write that the doctrine has been “the-case-which-must-not-be-named” at the high court for years; the conservative court may see this as the moment to give Chevron, as Justice Gorsuch put it in 2022, “a tombstone no one can miss”.

Dozens of friend-of-the-court briefs urge the justices to do just that: bury-Chevron filings outnumber save-Chevron briefs by a ratio of four to one. But the implications of ditching the 40-year-old precedent are contested. For the plaintiffs, “Chevron’s primary victim is the citizenry” because the approach “literally gives the tie to their regulators in every close case”.

Not all regulations, though, are as hard to swallow as forcing fishermen to dole out up to a fifth of their profits to an on-board observer. Federal agencies, staffed by some 2.2m civil servants with expertise that judges often lack, protect workplace safety and respond to natural disasters. They keep aeroplanes and financial markets aloft. The government warns that abandoning Chevron—which lower courts continue to rely on even as the Supreme Court has quietly ignored it—would “threaten settled expectations in virtually every area of conduct regulated by federal law”.

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Accounting

Business Transaction Recording For Financial Success

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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.

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Economics

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

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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.

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Economics

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

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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.

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