Bobby Turner touts private-sector solutions to societal woes

Idaho Mountain Express

August 03, 2018


Peter Jensen, Idaho Mountain Express

August 3, 2018–Capitalism has drawn plenty of criticism from some political circles in 2018, as democratic socialist candidates running for Congress decry the economic system’s abuses and promote government-run fixes to societal woes like lack of health care.

    But Bobby Turner, a keynote speaker at the 2018 Sun Valley Forum, told an audience at the Limelight Hotel on Wednesday that capitalism may be getting a bum rap—and a drive to create profit can provide solutions to problems that government and philanthropy have failed at repeatedly.

    The Sun Valley Forum started Tuesday and concludes today.

    Turner leads Turner Impact Capital and has teamed up with athletes including Magic Johnson and Andre Agassi to invest in underserved, urban communities, building real estate developments and constructing charter schools.

    A frequent criticism of capitalism is the disparity in wealth it has created in the U.S. The richest 1 percent of Americans now own more wealth than do the bottom 90 percent.

    Turner faulted a disparity of hope that affects millions of Americans, noting that 1.2 million high school students dropped out prior to graduation last year and 43 million families rely on food stamps. He said 78 percent live paycheck to paycheck.

    Turner said a student in the Baltimore public school system has a probability of graduating high school of less than 30 percent, while the probability of being sentenced to jail prior to age 30 is 50 percent.

    “The U.S. was built on the disparity of wealth,” Turner said. “Capitalism requires a disparity of wealth. We suffer from a disparity of hope.”

    He said that drove many people to support President Donald Trump in the 2016 election.

    “I don’t think that a vote for Donald Trump was a vote for hope,” Turner said. “It was a vote in defiance of both parties, Republican and Democrat, for failure to deliver on a promise of the American dream. We should have seen this coming.”

    He said government spending and philanthropic giving have created legacies of dependence. He contended that for-profit initiatives will have more success.

    His talk partly focused on his own experience. Turner said he was running a hedge fund two decades ago when his growing unhappiness forced him to reset his priorities. He refocused his work on four truths—materialism would never provide happiness, love was essential to good living, he needed opportunities to achieve and he wanted to make a positive impact on other peoples’ lives.

    “I became the 1 percent,” Turner said. “The sole metric of my accomplishment was the ability to create wealth. For me to win, someone else had to lose.”

    So, he and his wife began increasing their philanthropic contributions. He said he realized that this was “just throwing money at other people’s misfortunes.”

    “I evolved from an investor,” Turner said. “I believed I could make money and make a difference in the world. Doing good and doing well don’t have to be mutually exclusive.”

    He said that after establishing the Canyon-Johnson Urban Fund with Magic Johnson and raising $2 billion in private equity, Turner focused his attention to education.

    “Are high schools failing kids or are kids failing high school?” Turner asked. “I think high schools are failing kids.”

    He believed charter schools, which are set up independent of the public school system, offer a better education but are often sorely lacking in facilities.

    That leads charter schools to turn to philanthropic capital campaigns to raise money to build those facilities. Turner and Agassi teamed up to help.

    Turner said they’ve helped build 79 charter schools, with another 70 planned for construction in the next several years. They’ve created 41,870 seats in charter schools.

    He then turned his attention to the scarcity of affordable workforce housing.

    Turner said real estate developers will not be able to build new workforce housing and achieve a market-rate return for their investors. Too often, the existing stock of workforce housing is converted to condominiums or the units are renovated, driving up their price to the point that it’s no longer affordable to workers.

He said the No. 1 cost of operating workforce housing is tenant turnover. He said one of the key methods of stemming turnover and reducing cost is providing access to good schools and health care.

He said he has also focused on building health-care clinics that emphasize preventive treatments, rather than a fee-for-treatment model once a patient is sick. The clinics now serve 14,000 people, Turner said.

“Our health care reimbursement model is flawed,” he said. “There is a perverse intent built into our health-care system to keep people sick.”

    Overall, Turner said, his methods rely on profit generation—but place societal benefit as the top priority.

    “We’ve also changed the world and acted as a catalyst for hope,” he said. “I get to make money while I’m doing it. It’s not about how much money we have. It’s about making a positive impact in the world.”