Citigroup, Bank of America Smeared Again: Today's Outrage

NEW YORK (TheStreet) -- Citigroup (C Quote) and Bank of America (BAC Quote) are taking some unneeded abuse in a report on the banking bailout by Special Inspector General Neil Barofsky.

Barofsky's real target is the Bush administration, and former Treasury Secretary Henry Paulson in particular, with both being blamed for undermining the credibility of taxpayer funded rescue.

Paulson and other regulators should never have claimed that the initial round of bailout money went to healthy institutions for the good of the economy, Barofsky's report concluded.

Public confidence in the government was soon damaged when Citigroup and Bank of America required billions more dollars in aid to stay afloat, according to the report.

Aside from stating the obvious -- and spending taxpayer funds to come to this momentous conclusion -- Barofsky is now pretty much doing the same thing he criticizes Paulson & Co. of doing.

To make a point about comments by other public officials that undermined confidence in the government's rescue of the banks, Barofsky is making comments that undermine public confidence in the banks themselves.

This is the kind of irony that is lost on the government. The inspector general's report is especially pointless considering that Barofsky determined that the government acted properly in its efforts to avert a financial collapse.