Real Estate Investment Trusts (REITs) Are Big Players in the Nursing Home Industry: That Should Concern All of Us.

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REITs Are the “New Kids on the Block,” and they Swing a Lot of Weight

You may be wondering how the Carlyle Group unloaded 338 facilities in 2010 as it dismantled HCR ManorCare and pocketed over $6 billion from the sale of real estate.  You also may be wondering why that’s important.  I’m suggesting in this post that it’s important because legal entities known as “real estate investment trusts” (REITs) have purchased significant amounts of senior housing properties in the past two decades and are fundamentally changing the structure of the industry. Indeed, HCP (now Healthpeak), an REIT, picked up the HCR ManorCare properties from Carlyle.  Because of these kinds of deals, REITs have been integrated into the fabric of for-profit nursing care in a big way.

PE takeovers and massive sell-off of long-term care property in the first and second decade of the 21st Century ushered in a new REIT era in nursing home ownership. REIT’s and PE firms have been a “hand and glove” phenomenon in what amounts to a revolution in nursing home ownership.  As I will demonstrate in this and later blog posts, REITs are the new, and now the big, kids on the block in the nursing home business.

Furthermore, the growth of REIT ownership of skilled nursing property has been fueled by well-established chains such as Brookdale that are selling property for an infusion of cash.  These chains typically sell their property to REITs and hold themselves out as management companies. REITs create LLCs as operators (100% owners) and place each property in a newly created LLC and contract with companies like Brookdale to manage the facility. 

What is an REIT?

I’m writing this post to make a very important point that will be expanded, illustrated, and clarified in the months and years ahead on this blog: the primary mission of the nursing home industry is not medical care, nor is it real estate; rather, the corporate function driving the business of long-term care is financial engineering. Finance is not an ancillary function of REITs – it is the function.  The same can be said about the rest of the industry – whether the ownership structures of facilities are embedded in REITs, private equity portfolios, family trusts, family offices, limited liability companies, publicly listed holding companies and privately held corporations in their various legal forms, the mission of providers is extraction of cash as expeditiously as possible.

The financialization of the American corporation has roots that can be traced beyond the take-off period of Reagan-Thatcher neo-liberalism and Chicago School theories of corporate management.  REIT’s became part of the U.S. financial landscape with President Eisenhower’s signature on legislation creating publicly listed real estate trusts.

This legislation provided an opportunity for the “average American” to invest in real estate trusts, which prior to that time was limited to wealthy investors.  REITs as corporations could issue IPOs, raise capital, and gain a listing on a public stock exchange.  There are considerable tax advantages to the REIT as a corporation because these entities pay no corporate income tax on net income distributed to shareholders.  They are, however, as REITs, required to distribute 90% of their income to common stockholders.

When REITs Entered the Senior Housing Industry

Until 1999, REITs were legally authorized to own, lease, and trade in real estate.  They could not create wholly owned taxable reit subsidies (TRSs) for the purpose of owning and managing licensed skilled nursing facilities.  That changed with passage of the “Ticket to Work and Incentives Improvement Act of 1999,” which was ostensibly “intended to amend the Social Security Act to expand the availability of health care coverage for working individuals with disabilities, to establish a Ticket to Work and Self-Sufficiency Program in the Social Security Administration to provide such individuals with meaningful opportunities to work,and for other purposes” (https://www.congress.go/bill/106th-congress/house-bill/180/text).

Often, major pieces of legislation include an assortment of items that have no relationship to the law at its introduction. Tucked into the “Ticket to Work and Incentives Improvement Act of 1999” was Title V (Tax Relief Extension Act of 1999), Subtitle C, Part II, subpart a – “treatment of income and services provided by taxable reit subsidiaries.” From the perspective of how the nursing home industry would be changed in the years ahead, this arcane piece of legislation is a big deal.

With this legislation, “healthcare REIT” entered the lexicon of long-term care. As a new legal corporate structure, healthcare REITs interacted with private equity and well-established chains in a way not yet comprehended by advocates, activists, legislators, and the public in general. A massive amount of skilled nursing real estate has been shifted to these entities that not only own property but also manage operations. Furthermore, financial engineering is in continuous motion with property acquisition and trading, formation of joint ventures, contracting with facility management services, and formation of ownership networks.

REITs Are Spreading their Tentacles throughout the Long-Term Care Industry

If you are familiar with the skilled nursing industry, you will recognize corporations such Sunrise Senior Living, Kindred Healthcare, Brookdale Senior Living, Genesis, and so forth. As you peruse the financial statements of the major REITS such as Welltower (the biggest), Ventas, Healthpeak and others, you will also see those well-know company names as managers of REIT facilities, as joint venture partners, and as buyers and sellers of real estate.

Furthermore, REITs entered the senior housing market in 1999 – not nursing home care alone. Many nursing home facilities are embedded in in Continuing Care Retirement Communities (CCRCs). Some of their properties and operations are stand alone assisted living facilities, or senior apartments.

Federal dollars Flowing into REITs Are Not Only From Medicare & Medicaid

It would be difficult to identify an industry that is as subsidized by federal and state government as the long-term care industry. REITs are subsidized through a steady stream of patients reimbursed through Medicare and Medicaid. With relief from corporate income taxes, and subsidies such as capital gains, depreciation allowances, and interest deductions, REITs are provided with major tax expenditures.

In future posts, I will explain why the amount of public funds flowing into REITs and other legal structures through Medicaid, Medicare, and tax subsidies enriches investors and executives but does nothing to improve conditions in long-term care facilities. It is important for advocates and activists to use financial information to rebut the industry’s claim that operators can’t afford to provide better care. It is probably the case that facility-level management can’t afford to provide higher quality of care. However, that can be attributed to extraction of funds by holding companies, REITs, and other endpoints in the flow of capital from the front door of the facility to the consolidated financial statements of the entities at the top of the chain.

By Dave Kingsley 2/14/2021

Watch this Space for Our Upcoming Interview with Michelle Neufeld, Manager of the Pleasant View Nursing Home in Inman, Kansas – A Home-Like Alternative to the Typical Skilled Nursing Institution

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Five churches of different denominations, coming together in a small town in central Kansas to build a caring alternative to the typical nursing home institution, is a story we want to tell.  Hence, Kent Comfort will be interviewing Michelle Neufeld, the manager of Pleasant View nursing home in Inman, Kansas. The video of the interview will be posted on this blog.

Let’s face it, people overwhelming disdain nursing homes and never want to be in one.  The reason for that widespread attitude is the dehumanizing conditions people experience when they can no longer stay in their homes. The trauma of leaving our lifeworld of living space, family, friends, pets, neighborhood and enter a depersonalized medical institution to share a room with a stranger is something none of us ever want to experience.

I made a visit to Pleasant View during which I had the opportunity to speak with employees and residents.  The high rate of satisfaction in the home is palpable.  So, yes we can! We can provide long-term care that respects the dignity of patients. This enlightened alternative to the current system of long-term care is a model that is feasible.  We want our readers to know about it.

By Dave Kingsley

Nursing Home Corporations are Beginning to Release Fourth Quarter Earnings. Are their Hardship Pleas Merited? Or is it Propaganda?

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The Ensign Group, Inc. (Nasdaq: ENSG) has Reported Robust Fourth Quarter Earnings – Now We Need to Discuss How Well They Protected Patients in Their Care from COVID

The information in this post is based on a conference call and webcast on February 4, 2021 at 10:00 A.M. PT (https://markets.businessinsider.com/news/stocks/the-ensign-group-reports-fourth-quarter-and-fiscal-year-2020-results-1030040511).  When Ensign’s annual 10-K report is available, we will analyze all quarterly reports and their annual results to determine their overall 2020 performance.  We are interested in the amount of revenue the corporation received in the form of CARES Act grants/loans and other subsidization from various federal departments (e.g., HHS, IRS, etc.).

During the 4th quarter (Oct, Nov, Dec), the COVID pandemic spiked to levels unseen prior to that time.  Here are a few highlights from the Ensign release of 4th quarter results, which includes annual results:

  1. Earnings per share of $0.82 represent an increase of 67.3% over the prior year quarter.

  2. Earnings per share of $3.06 represent an increase of 86.6% over the prior year.

  3. Revenue of $2.4 billion for the year is an increase of 18.3% over the prior year.

  4. Medicare days increased by 22.1% over the prior year; hence, skilled revenue increased by 14.7% over the prior year.

  5. Real estate segment income of $31.3 million is an increase of 79.2% from the prior year.

  6. 2020 net income of 174.6 million is an increase of 74.8% over 2019. Fourth quarter earnings of $44.9 million represents an increase of 33.9% over the 4th quarter of 2019.

Although Ensign stock crashed with the rest of the market in mid-March 2020, it has recovered and has been trading in the low $80s.  It closed on Friday, February 5, 2021 at $83.82.  Analysts have rated it as “strong buy” (https://www.msn.com/en-us/money/stockdetails/analysis/fi-a1rzsm).

CEO Barry Port had the following to say about 2020 operating results: “In spite of the continued challenges brought on as the result of the ongoing global pandemic, we are very happy to report another record quarter as we achieved our highest earnings per share in our history.”  He went on to praise the performance of “local teams” in protecting patients from COVID-19.

Whether The Ensign Group Deserves Praise for its Protection of Patients from COVID Remains to be Seen.  What Happened in Kansas City is not Strong Evidence that the Company Placed Care Over Extraction of Cash.

I must say that reading Port’s glowing report of Ensign’s infection and disease control effectiveness, I’m experiencing cognitive dissonance.  Last April, The Ensign Group’s Riverbend facility in Kansas City, KS began to appear in the local media as something of a poster child for COVID-19 deaths in nursing homes (e.g., Laura Bauer, “Two more COVID-19 deaths at Riverbend nursing facility in KCK reported Sunday,” https://www.kansascity.com/news/coronavirus/article241959296.html).

In January of 202 – prior to public awareness of the severity of the pandemic – the Riverbend facility received the lowest rating of 1 out of 5 stars on the CMS Nursing Home Compare website.  The facility was cited for lack of infectious disease control.  Apparently, fixing that problem was not a high priority for the company. As early as January, the world was becoming aware of a novel virus that could become a deadly pandemic outside of China’s borders.

I was interviewed by Fox4 News regarding the Riverbend situation and the nursing home industry in general. My words were reduced to rather meaningless soundbites.  Unfortunately, local and national media are not geared these days to in-depth research and analysis.  After focusing on the scandalous Riverbend deaths for a short period of time, the media jumped to the next scandal and then to the next scandal and on and on – from scandal to scandal.  No adequate analysis of the overall industry has been forthcoming.  Hence, Mark Parkinson and the AHCA can get away with claiming that the industry couldn’t afford to do any better than they have done.

Will the industry escape accountability for the deaths of people entrusted to its care?  Will our government, media, and the public just move on with no serious inquest into how corporations could remain profitable while they allowed perhaps 200,000 people in their facilities needlessly suffer and die? I’m horrified by the thought that the answer to these questions will be yes.  I’m not hearing much interest in pulling back the curtain on the opaque finances of the closely held corporations paid with Medicare and Medicaid dollars to determine what they could have and should have done to protect their patients.

By Dave Kingsley

Don’t Believe Nursing Home Industry Propaganda: Providers Are Doing Fine Financially

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Mark Parkinson’s “Year-of-COVID” Strategy is Clear:  Make Nursing Home Corporations the Victims of the Pandemic Rather than the Negligent Providers they Have Been.

Mark Parkinson, former governor of Kansas, is the CEO of the American Health Care Association (AHCA), which is the well-funded and powerful nursing home industry lobby. I have heard Parkinson interviewed several times on CNN and have seen his comments in various publications during the past year.  His job is to turn derelict nursing home corporations into victims.  In an interview with Skilled Nursing News a couple of days ago he bemoaned the hardship placed on nursing homes by the pandemic.  He relied on a drop in capacity from 80% to 75% but provided no financial evidence how that affected financial performance given the high rate of reimbursement for COVID patients and a plethora of subsidies from federal and state agencies.

No one should fall for the former Kansas governor’s propaganda.  If he were interested in scientific, objective data to justify the victimhood he claims for his corporate members, he would support our demands for transparency.

We know that the big publicly listed corporations have been reporting adequate to robust earnings over the past year.  However, most nursing home corporations are closely held and operate behind a veil of secrecy.  They incessantly employ a false narrative claiming that net earnings are so thin that the current system – much of which entails indecent, and inhumane care – is the best they can do given the amount of reimbursement they are receiving from Medicaid and Medicare.

Because of the passivity of legislators, the public, and advocates in the face of this scurrilous misinformation (propaganda), lobbyists can get away with appearing in front of legislative committees and claim that net earnings are so low that they can’t properly staff facilities or create environments providing decent care.  There is no demand that they open their books and show us the money trail.  

We know that funds flow into facilities from Medicare, Medicaid, and private pay reimbursements.  It flows out through an opaque network of LLCs – generally all owned by the same investors, e.g., private equity firms, real estate investment trusts, family trusts, family offices and assorted other financial entities.  If Parkinson would like for us to accord him any credibility, then he needs to show us the lease, consulting, management, and other contractual arrangements the LLCs have with one another.  

Mark Parkinson, Former Governor of Kansas, is a High Paid Propagandist for the Nursing Home Industry.

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Mr. Parkinson Goes to Washington. His Current Task is to Cover Up Corporate Responsibility for Massive Loss of Life Due to COVID

Mark Parkinson, Former Governor of Kansas & CEO of the American Health Care Association

When Kathleen Sibelius was appointed HHS Secretary by President Obama, her Lieutenant Governor, Mark Parkinson, became governor.  His first major act was to nullify one of his predecessor’s last acts. Governor Sibelius had denied a permit for a dirty, hyper-polluting, fossil fuel, power plant in Southwest Kansas. Parkinson reversed her decision and granted the permit.  That was probably Parkinson’s only significant act as governor.  He finished out what would have been Sibelius’s term and immediately left for a high paying gig in Washington, D.C. – as CEO of the American Health Care Association (AHCA).

The AHCA lobbies on behalf of its nursing home corporation members.  According to the organization’s 2019 IRS 990, it has annual revenues of $40 million – most of which is derived from member dues.  Parkinson’s 2019 compensation was reported on the 990 as $2.5 million. (https://projects.propublica.org/nonprofits/organizations/530260105). 

These days, Parkinson is busy converting AHCA corporate members from negligent providers of care to victims of COVID-19 by pleading hardship on their behalf for what could be 200,000 deaths in the so-called “nursing homes” of America. In the last few days, he was quoted in Skilled Nursing News bemoaning the poor financial outlook for the nursing home industry(Parkinson: Nursing Homes’ Financial, Operational Recovery ‘Completely Tied to Visitation’ – Skilled Nursing News).  As our past and current posts regarding earnings of publicly listed provider corporations have demonstrated and will likely continue to demonstrate, long-term care providers are in fact doing quite well.

The Rights of Nursing Home Patients and their Families are up against AHCA Corporate Members & Their Deep Pockets 

Make no mistake about it, the AHCA, with affiliates in all 50 states, swings far, far, more weight in Washington and state capitols than well-meaning advocacy and activist groups could ever hope for.  Indeed, the power relationship between the industry and advocates is asymmetrical.  That explains why regulation is weak and quality of care remains low.

For instance, according to Section B. of the AHCA IRS 990 (displayed below), $3,197,201 alone was spent on software and public relations/lobbying firms in Washington, D.C.  The software helps link 50 state chapters and coordinate campaign and lobbying activities.  The $2 million plus expenditure for “public affairs,” “audio visual solutions,” “communications,” and so forth in a single year is a component of the industry’s propaganda juggernaut. Much of the rest of the $40 million is spent on Democratic and Republic governor’s associations and other purchases of political influence.

What Does $40 Million Buy the Nursing Home Industry in One Year?

Immense amounts of cash, decades of lobbying expertise, and a high paid staff can guide legislation and regulation in a direction that benefits corporations at the expense of patients, families, and communities.  Stated differently, the AHCA is a well-oiled propaganda machine.

AHCA framing and narratives have been effective in creating a Panglossian viewpoint among the public, media, and even advocates.  Although it is common to hear negative comments about the industry such as it is “greedy,” “puts profits above people,” and other such disparaging remarks, a psychologically complex set of beliefs neutralize this disdain. Industry propaganda has undermined the public’s suspicion that greedy industrialists are pocketing excess amounts of Medicare and Medicaid funds through unjustified cost cutting.

The gargantuan amount of PR money spent by the AHCA and expertise in manipulating public opinion has instilled a subliminal belief among a wide swath of the public.  Their narrative is that the nursing home system is the best there is in the best of all possible worlds.  Stated differently, the industry would have you believe that Medicare and Medicaid reimbursements are too paltry for them provide better care and remain in business.  Their lobbyists and PR mavens brilliantly induce the belief that net earnings are so thin that humane care is financially out of reach.  This is a scurrilous lie.

By Dave Kingsley

Message to the Reactionary Wing of American Politics: There is no Socialism in the United States

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The U.S. Does Not Have a Socialist Economy or a Government Based on Marx’s Political Philosophy. But We do Have “The General Welfare Clause” of the Constitution.

There is no socialism in the United States: bupkus, nada, zip, none whatsoever. The United States has a capitalist economic system. Furthermore, we are a democratic-republic. That will not change in the foreseeable future.  What we also have is constitutionally justified “general welfare” for alleviating suffering of citizens left behind by advancing technology, for meeting fundamental needs of those who have experienced personal or societal catastrophes, and for addressing other threats to the “general welfare” of the populous, e.g., climate change, nuclear waste, and other threats to safety and health of Americans.

The framers of the constitution anticipated the probability of events or trends that would threaten the well-being of citizens on a wide scale. Hence, they included the “general welfare clause” in the constitution as a raison d’etre for federal spending to protect the populous from extensive harm.

Article I, Section 8, Clause 1 of the U.S. Constitution states that:

“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.”

Libertarians, Neocons, and Other Right-Wing Groups Claim that the General Welfare Clause is Meaningless.  The Supreme Court Has Clearly Held that they are Wrong

Based on an interpretation of the general welfare clause, the Supreme Court has held that OASDI, Unemployment Insurance, Medicare, Medicaid, TANF, and a Host of other Government expenditures for meeting threats to “we the people” are constitutional (see e.g., U.S. v. Butler, 297 U.S. 1, 1935, Helvering v. Davis, 301 U.S. 619, 1937, Steward Machine Co. v. Davis, 301 U.S. 548, 1937, and New York v. U.S. 504 U.S. 144, 1992).

Those opinions are now part of the warp and woof of U.S. constitutional law. Nevertheless, conservative forces have been pushing a false narrative, i.e., “The Supreme Court is wrong and continuing to improve the welfare of U.S. citizens through government expenditures is moving the U.S. toward socialism.”  This kind of nonsense is coming out of the Hoover Institute, The Heritage Foundation, the Koch-funded Cato Institute and other reactionary, conservative propaganda organizations (see, e.g., John Cogan, “High Cost of Good Intentions: A History of U.S. Federal Entitlement Programs”).

Liberals have Failed to Develop a “Constitutional versus Socialistic” Narrative Based on the Truth. Why is this important?

A radical, reactionary right-wing has always existed in the United States and has, since the rise of communism soon after the dawn of the 20th Century, labeled liberals as communists and socialists.  Indeed, red baiting has been a barrier to improving the lives of U.S. citizens left behind by industrial capitalism.

The “general welfare” clause justifies a safety net for individuals thrust into poverty by technological advancements which reduces the need for labor.  Furthermore, care for an aging population, extension of the benefits of advanced medical care to all citizens, and a morally decent standard of living for our society as it has evolved have been held to be constitutional under the clause by the Supreme Court.

Accusing Democrats and liberals of “socialism” and “radical leftism” should be laughable, but it is working for reactionaries.  It’s working because Democrats and liberals have failed to go on offense with a narrative based on the truth: (1) Federal expenditures are justified by the U.S. Constitution, (2) A capitalistic system will, of necessity, fail to meet the fundamental needs of all U.S. citizens, and (3) A decent system of government in the wealthiest country in the history of humankind has the constitutional duty and obligation to take up the slack between what private enterprise provides and what the entire population needs.

It is amazing to me how well right-wing red baiting has worked to keep people in poverty, without medical care, in substandard long-term care, in bad air, drinking bad water, and in all sorts of other threatening situations.  The liberal side of the political spectrum can do a much better job of framing and development of a narrative. Insofar as the accusation of “socialism/communism,” let’s just apply this metaphor: that dog doesn’t hunt. It is false. Let’s not stay silent in the face of it. Rather, let’s go on offense with our own narrative: “Yes we can afford to create a decent society and have the wealth to bring it about!”

Posted by Dave Kingsley 2/6/2021

The State of Long-Term Care in America: Video interview with Professor Charlene Harrington, UCSF

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Check out our Tallgrass Economics podcast interview with Professor Charlene Harrington. Professor Harrington is a gerontologist, registered nurse, and holds a PhD in sociology. She has made extensive contributions to the scholarly literature pertaining to long-term care, and is well known across the United States for her vast knowledge and presentations before legislative and regulatory bodies. Dr. Harrington has important insights to share pertaining to the current state of nursing home and senior care in America.

Kent Comforts interview with Professor Harrington can be accessed at:

https://youtu.be/_4JXC-cE3SI

Watch for our Interviews: Coming Soon

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By:

Dave Kingsley

To better disseminate information about the current nature of the senior living industry, the condition of Social Security & Medicare, and other issues pertaining to the economics and politics of aging, we will be conducting interviews with professionals, workers, politicians, and others with something important to say about the elderly and the political economy.

Kent Comfort’s interview with Professor Charlene Harrington will be posted in the next day or two. We feel that sharing professor Harrington’s vast experience, accomplishments, and knowledge in the field of long-term care is invaluable for informing all Americans who would like to see the United States move toward a more humane form of care in nursing homes. For instance, her comments on the Norwegian system of long-term care are of importance to understanding what could be instead of what is.

The Disappearance of Scientific, Rational, Commonsense Thinking

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By:

Dave Kingsley

In the Age of Show Business, Public Discourse Is Often Dangerous Nonsense

The current spread of absurd QAnon, conspiracist, white supremacist beliefs is the apotheosis of the takeover of our minds by infotainment, sound bite journalism, and the dumbing down of Western, liberal societies. Preceding the Trump presidency, a broad swath of the public was conditioned to believe about anything posted on the internet. So, a dangerous demagogue was able to capture the U.S. government by spreading hateful myths about an African American president and Hispanic immigrants.

A violent racist, anti-Semitic movement has also been intertwined with the growth of fanatical, anti-science religious groups across the U.S. In the early 2000s the “religious-right” successfully attacked and derogated science curricula in public schools. Critical thinking in science classes was significantly diminished.

There is no doubt in my mind that the failure of progressives, liberals, moderates, and principled conservatives to counter a crazy right-wing attack on science has contributed to the growth of irrational beliefs – leading to hundreds of thousands of preventable deaths during the raging COVID. It was hard for us to believe that a Donald Trump and what he has wrought would really happen in this country. We thought that the moral high ground would be good enough and our emotional appeals to human decency would be a viable narrative and strategy.

Beware of Slick, Simplistic Presentations

Science is skeptical. It is also hard work. In the age of show business, the most entertaining and amusing presentations will grab attention of an audience far quicker than substance requiring some mental effort. Nevertheless, empirical evidence in support of a position is absolutely necessary.

Science is a process. Hence, it is also necessary for the audience to not only respect the credentials of presenters – if they actually have the credentials – but at the same time, the audience and colleagues must be engaged in an exchange. Do we understand each other? How do we deepen our knowledge and make better decisions in the public interest? What can we all contribute to the effort? These are questions designed to prevent audiences given to passive acceptance to whatever expert or even charlatan is disseminating.

Advocates & Activists Must Demand Scientific Analyses and the Truth: We Owe it to our Fellow Humans

Professionals and volunteers advocating and agitating for better conditions for those around us deprived of human decency and subjected to dehumanizing and abusive medical care are responsible for seeking the truth. For example, the financial-real estate-medical industrial complex is providing misleading information about the federal and state funds flowing into and out of the nursing home system.

The long-term care industry has been able to trick legislators, advocates, and the public far too long with their hardship pleas. The truth is this: the nursing home system is structured for the flow of capital through an opaque pipeline, which in the final analysis benefits ultra high net worth individuals and contributes to the maldistribution of wealth.

Commonsense, scientific, rational thinking is needed to debunk the false narratives of an industry dedicated to finance rather than humane care. That is what this blog is all about and we will advocate and agitate for a counter to the nonsense far too often swallowed by legislators, regulators, the media, and the public. We can see what’s coming. Things will not get better on their own.

The Threat of White Nationalist Terrorism to American Democracy: A Common Sense Understanding

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By:

Max Skidmore

Editor’s Note: This post by Max Skidmore is an excerpt from his recently published book The Common Sense Manifesto (Washington, D.C.: Westphalia Press, 2020, 41-43). It is important to remember that this was published in February 2020, nearly a year before the violent insurgency that attempted to seize power from the United States Congress. Then, consider how much recent events have demonstrated that this warning was not exaggerated; the United States was threatened by a clear and present danger from right-wing extremists, and also from self-described “conservatives,” who constituted the Republican Party.

Law enforcement officials became aware decades ago that one of the greatest dangers threatening Americans came from white nationalists, and from various neo-Nazi groups. This is especially true given the widespread availability of even the most lethal firearms to virtually anyone in the United States. Prudently, the Department of Homeland Security began to look carefully at such groups, and to study them seriously. 

When they learned of such studies, though, American conservatives raised vehement protests. Studies of threats from the extreme right, they shrieked, were attempts to suppress “conservatives.”  So powerful was their reaction that the Department of Homeland Security halted all such studies. Republican office holders recognized immediately that studies of right-wing dangers absolutely required study of the dangers of American conservatism, itself. 

Damning examples are easy to find.  In 2016, Ron Nixon wrote in the New York Times that “Homeland Security Looked Past Antigovernment Movement.”[1] In 2012, an article in Wired was titled, “DHS Crushed This Analyst For Warning About Far-Right Terror.”[2] As far back as 2011 the Washington Post reported that “Homeland Security Department Curtails Home-Grown Terror Analysis.”[3] All that led to the anguished cry in November of 2018 that “Law Enforcement Failed to See the threat of White Nationalism. Now They Don’t Know How to Stop it.”[4]

The irony of the situation is what it says about the unintended candor of the conservatives who protested in the first place. In a twisted way, there is something humorous here. Despite their generally staid lifestyles as privileged members of the moneyed elite, Republican elected officials argued that targeting dangerous extremists—those who were often living in the woods while stockpiling assault weapons and the like—was to target “conservatives.” 

They were closer to being accurate than they seemed. The casual observer could have thought of this as paranoid nonsense, but the conservatives knew better. They knew very well that the most violent elements of society were kindred souls ideologically with themselves. As the discussion here makes clear, the violent potential of their ideology brought them closer to their alt-right relatives. Such closeness between overt violent extremists and their kindred in the alt-right has brought about a most terrifying result. 

The Republicans have energized the most violent, and least rational, segment of the American electorate.  Because of the electoral college that disregarded nearly three million more votes for Hillary Clinton, they managed to elect to the presidency of the United States an ignorant and malevolent buffoon. Despite some early criticisms from a few Republicans, he quickly became “their guy,” and Republicans lined up to give him their firm support as he slashes, burns, and rips. 

At the same time, he also whines, and complains that he is being mistreated. He, who obviously knows almost nothing about history or past presidents, says that he is being treated more unfairly than any other president in history.

A widespread uprising has yet to be experienced, but irrational violence is becoming increasingly common. Mass murders are so frequent that they seem almost to have become normalized. On 3 August—on a single day—there in fact were two such massacres by white nationalist terrorists, widely separated. The first was in El Paso, Texas, followed shortly by the other in Dayton, Ohio. Each caused multiple deaths. Even Trump conceded that “perhaps” more should be done (at least until later, when he backtracked after having spoken with an NRA official). His supporters, and perhaps others as well, say that it is unfair to hold Trump responsible. To anyone familiar with American politics, and with Trump’s rhetoric, common sense should make it impossible to deny a definite connection.

[1] Ron Nixon, “Homeland Security Looked Past Antigovernmental Movement, Ex-Analyst Says,” New York Times (8 January 2016), https://www.aol.com/article/news/2019/03/17/white-house-dismisses-praise-of-trump-by-new-zealand-shooter/23694289/ (accessed 27 March 2019).

[2] Spencer Ackerman, “DHS Crushed This Analyst  For Warning About Far-Right Terror,” Wired, (7 August 2012), https://www.wired.com/2012/08/dhs/ (Accessed 27 March 2019).

[3] R. Jeffrey Smith, “Homeland Security Department Curtails Home-Grown Terror Analysis,” The Washington Post(7 June 2011), https://www.washingtonpost.com/politics/homeland-security-department-curtails-home-grown-terror-analysis/2011/06/02/AGQEaDLH_story.html?noredirect=on&utm_term=.abfcf3e66cc2 (accessed 27 March 2019).

[4] Janet Reitman “U.S. Law Enforcement Failed to See the Threat of White Nationalism. Now They Don’t Know How to Stop it,” The New York Times Magazine (3 November 2018), https://www.nytimes.com/2018/11/03/magazine/FBI-charlottesville-white-nationalism-far-right.html (accessed 27 March 2019).