Value Add, "Free Markets", and Romney (longish)

Atrios: One thing I haven't seen anybody talk about is the fact that Obama somewhat eloquently made the case for Medicare for all during the debate. Those insurance companies are too horrible to inflict upon seniors. And the rest of us, also, too.
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Vitus: Someone phuleeze inform us of what the value-add of health insurance companies is. For their customers, that is.

"Conservatives" rant all the time about how wonderful a market-based system is. Except at the point when they themselves must confront actual markets.
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Vitus learned about value-add at the feet of a master: Ray Noorda. In the management hierarchy at Novell in the heady days of the late '80's - early '90's, a lesson learned deep in an executive's soul was that if one did not produce - not just random production, but in a way that materially added to the business of making and selling Novell software, one could expect to be posted to Alaska, or worse.

The business concept at Novell was straightforward - Novell made networking software which solved problems for people's businesses. Noorda made very sure that the company never got too distracted from customer-focused development and sales.

The point here is that to Vitus, the Novell experience taught that the essence of a success in "business" is adding value for customers. This is in juxtaposition to a belief by "conservative" actors that a religiostic intonation of the term "Free Markets" will render the work of a business essentially done. But, you say no: What you really are after is regulatory relief? Of course, there exist regulations which might be onerous in some circumstances (maybe not so much now as in the 60's...). However, if the success of your business depends on a material change to the regulatory regime, perhaps there's another business you should be in. Said in a more pithy, Vitus preferred way, if what you do with your time is to work the system rather than honestly building things, you are the most scurrilous of economic actors: A rent-seeker.
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Mitt Romney tries to advance the proposition that the he is a master of the business world, and, that America would do well to adopt him to lead her into the future, whence the great benefits of his mastery will perforce accrue to her citizens.

Well, what is the measure of his Mastery? He is rich. Is that it? What services and products did he provide and to whom? Vitus has a post about Romney's mastery of business. From that, we see that Romney's customers were his investors. They did extremely well because of Romney's business accumen, right? Hmmm.

• Ritholtz shows that Romney's company, Bain Capital, "took lots of risk, use immense leverage, and charged enormous fees, for performance that was more or less the same as indexing." 
• Romney, a prominent Free Market champion, depended and depends on the ...uh... government to essentially give him money, through the Carried Interest tax break. James Surowieciki: Private Equity derives "enormous wealth not from management or investing skills but, rather, from the way the U.S. tax system works. Indeed, for an industry that’s often held up as an exemplar of free-market capitalism, private equity is surprisingly dependent on government subsidies for its profits"

That is to say, Romney's business value-add turns out to be non-existant, except to himself. He did not create jobs - he destroyed them. He did not save failing businesses - he looted them. He's not a free-market champion - he's a welfare queen. By Ritholtz, he did not serve his investors well. By Suroweicki, were it not for his relieving you of a ton of your tax money, he, as a fairly intelligent man, would arguably be well off at his age, but he would not be a super-rich guy who's basically buying a Presidential bid. "Free Markets" for you; free money for Mitt.

Romney is probably, for once, speaking the truth when he says he loves America - just as an Emir loves his concubine.
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Update 10/16/12:  Somewhere in the "free money" paragraph above we should have noted that Romney did not, with Bain Capital, "build it",  as Obama noted, with "unfortunate syntax", about most self-built businesses.  But with Bain Capital, the Obama quote is especially apt.  Romney founded the company with money from Salvadoran families tied to death squads.