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Economics

Trump’s lead over Biden may be smaller than it looks

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10 months ago

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IF AMERICA were to hold its presidential election tomorrow, Donald Trump would be picking out curtains for the Oval Office. The Economist’s polling average puts him up by 2.3 points over Joe Biden nationwide (see top chart). And across the six swing states expected to decide the election—Arizona, Georgia, Michigan, Nevada, Pennsylvania and Wisconsin—he leads by an average of 3.8 points. Betting markets list Mr Trump as a clear favourite. Never in his past two campaigns were his general-election polls this strong. Is it time for the world to brace itself for a second Trump presidency?

The election is still nine months away. Historically, polls taken before the summer of an election year have been poor predictors of results. But no former president has sought to return to office since the advent of modern polling. Opinions about the omnipresent Mr Trump are much firmer than they are about typical challenger candidates, who at this stage of the race are usually still fighting to secure their party’s nomination. As a result, even though Mr Trump is not yet the presumptive Republican nominee, current head-to-head polls between him and Mr Biden may be unusually informative.

Nationwide surveys over the past month have varied widely, ranging from an eight-point lead for Mr Trump to a six-point edge for Mr Biden. Polling averages, which blunt the effect of such outliers, suggest that Mr Trump holds a clear lead. But the polls that comprise such averages differ in their methods and degree of rigour. Democrats hunting for a silver lining can take solace in one clear pattern: pollsters with the best records of accuracy show better results for Mr Biden. Lower-quality pollsters are kinder to Mr Trump.

Public trust in polling has weakened following the industry’s high-profile underestimates of Mr Trump’s support in 2016 and 2020 (although polling before the 2018 and 2022 midterm elections was accurate). Reliably estimating pollsters’ accuracy—measured by the size of their historical errors and whether they consistently exaggerate support for a particular party—requires a large sample of surveys across many elections. FiveThirtyEight, a data-journalism outfit, recently updated its ratings of American pollsters. It assesses them on a combination of their records and their methodological transparency.

Chart: The Economist

Some pollsters are consistently more accurate than the field. But there are many ways to judge quality. The Economist’s general-election polling average weights polls solely by sample size and recency, so larger and newer polls contribute a greater share to the overall score. On this basis, Mr Trump leads Mr Biden in national polls by 2.3 points. That compares with a 0.2-point lead for Mr Biden in an unweighted average that gives polls from six months ago the same weight as those from this past week.

The size of Mr Trump’s lead varies widely by the quality of pollster, as assessed by FiveThirtyEight (see bottom chart). This early in the election cycle, the pollsters in its highest tier have run polls only sporadically. (An exception is a weekly survey by YouGov, an online pollster, for The Economist.) However, in total, 13 polls have been conducted in 2024 by firms in this group. On average, they show a virtual tie between Mr Trump and Mr Biden.

By contrast, most polls released in January 2024 have come from firms with good but not exceptional records. Polls in these (“good” and “decent”) tiers show Mr Trump with a 2.4-point and 1.7-point lead respectively. Meanwhile, pollsters with a poor record or no previous published results show Mr Trump with an average lead of around six percentage points.

National polls reflect the general mood, and correspond to the popular vote. But thanks to the electoral-college system, winning the popular vote is no guarantee of electoral victory. In 2000 and 2016, for example, Republican nominees won the presidency despite losing the popular vote. In recent decades the electoral college has benefited Republican candidates. If Mr Trump were to win the popular vote by a six-point margin, he would almost certainly win at least 358 electoral-college votes, giving him the largest Republican victory since George H.W. Bush‘s in 1988. This would bring into play even states that Mr Biden won comfortably in 2020, such as Maine, Minnesota, New Hampshire, New Mexico and Virginia.

To those who think that all polls are created equal, Mr Trump has opened a modest but growing lead nationwide. But to those who insist that pollsters’ historical accuracy predicts future accuracy, the candidates are in a dead heat.■

Stay on top of American politics with The US in brief, our daily newsletter with fast analysis of the most important electoral stories, and Checks and Balance, a weekly note from our Lexington columnist that examines the state of American democracy and the issues that matter to voters.

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Accounting

Business Transaction Recording For Financial Success

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4 hours ago

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January 18, 2025

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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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10 hours ago

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January 17, 2025

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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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1 day ago

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January 16, 2025

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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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