Is Obama Turning on Goldman Sachs?

As President Barack Obama hits the endgame for health care reform, is he making a ploy to associate price-gouging insurance companies with Wall Street greed? Goldman Sachs recently released a report encouraging investors to buy up shares in two large insurance firms and thereby profit from the industry’s soaring premiums. Now, the White House is making that brief the centerpiece of Obama’s closing argument for overhauling the health system. It appears that Obama is subtly using the Wall Street titan’s toxic reputation to demonize the insurance industry and rally public support for a comprehensive bill. 

In a health care speech in Pennsylvania on Monday, Obama delivered a broadside against profiteering insurance firms. As an example of the industry’s greed, he highlighted a conference call organized by Goldman Sachs. “An insurance broker told Wall Street investors that insurance companies know they will lose customers if they keep raising premiums,” Obama said. But, he added, the lack of competition allows insurers to keep premiums high for their remaining customers. “And they will keep doing this for as long as they can get away with it.”

Obama’s reference to the Goldman Sachs paper was no isolated incident. The White House press operation highlighted the report in a PR barrage targeting unfair insurance practices. White House communications director Dan Pfeiffer called attention to the study in a blog post on Sunday, while deputy press secretary Bill Burton pushed the report in a press gaggle and on Twitter on Monday morning.

The White House’s emphasis on the Goldman brief is especially intriguing considering that the administration has previously come under fire for its relationship with the Wall Street investment bank. Goldman Sachs was the single largest private donor to Obama’s presidential campaign, and a number of high-ranking administration officials are Goldman alums, including Treasury Secretary Timothy Geithner’s chief of staff, Mark Patterson. Over the past year, Goldman has been attacked for profiting from everything from AIG’s collapse to the Greek financial crisis. But although Obama has recently revved up his rhetoric against Wall Street buck-raking, he has generally trod carefully when it comes to the big financial firms, whose cooperation he needs to pass his financial reform package. Last month, for instance, Obama said that he didn’t “begrudge” Goldman CEO Lloyd Blankfein for taking home a $9 million bonus, noting that some professional baseball players made more money.

Could Obama be preparing to do an about-face on Goldman Sachs? The Institute for America’s Future, a progressive think-tank, notes the White House’s strategy amounts to guilt by association. “The president is connecting the dots for the American people,” says Diane Archer, the organization’s health care project director. “Goldman Sachs and its clients like health insurance monopolies. The president is making clear that the lack of competition in the insurance industry is good for Goldman’s investors and the insurers, but it’s not good for Americans.”

Goldman Sachs didn’t respond to questions from Mother Jones on Monday about Obama’s strategic use of the firm’s report. But it’s hard to imagine that White House officials didn’t have Goldman’s reputation as Public Enemy No. 1 in mind when they put the firm’s brief at the front and center of Obama’s last-chance push for health care reform.  

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