[adamtj]

Lets assume there is not just no social value, but a negative social value to shorting. I fail to see how you can make the leap from saying that shorting is bad for society to saying that we should ban shorting. Alcohol is bad for society, we should ban alcohol. Television is bad for society, we should ban television.

In America, it's currently Memorial Day, when we celebrate the people who have fought and died to defend our freedoms -- even freedoms that seem bad. Our soldiers carry our flag into battle and die for our right to burn that flag in protest of their actions.

I hope you aren't an American, given the way you so flippantly propose throwing away freedoms because it might hurt poor little society. "Society" isn't a thing. There are only people. If you propose a change in the laws, then you need to argue about individuals and the liberties they will gain or lose, the freedoms that will be protected or weakened. If you propose throwing away some liberty, you must make a very strong case indeed, as it is much easier to destroy liberty than to win it back.

You are essentially proposing that we take freedom from traders to give security to stakeholders. (Nevermind the fact that stakeholders are often the traders.) That is almost never a win. Without liberty, there is no security. Just ask any slave or dictator's subject.

[jayruy]

"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty or safety." -Ben Franklin

But seriously there's no reason to get so strident about it these days. Because of rational pricing (http://en.wikipedia.org/wiki/Rational_pricing), it's extremely doubtful you could find a single economist at a respectable institution who thinks shorting is bad.

In a sense, it's such a abstract issue that I can never see a politician stirring populist sentiment against the sober advice of economic policy advisors. It's simply a short term fail-safe to give politicians time to act.