Banning Short Selling?

*Update* – I had to remove Obama from this rant, since I can’t find any evidence that he specifically has called for the ban on short selling. Here’s McCain.. Here’s Clinton and Schumer.

What’s next?

  • Forcing outfielders to remain in the outfield when the batter is clearly going to bunt?
  • Lining up in a deep formation when the opposing football team is going to do an onside kick?
  • Forbidding the purchase of a UPS system for your computer?
  • Banning RAID-5?
  • Banning Life Insurance and/or Disability Insurance?
  • Forbidding the practice of limiting driving, and hoping that the price of gas comes down?

This is precisely the kind of stupid bureaucratic ridiculousness that I despise. Since some politicians (who are, economically, morons) think that short-selling is bad, the SEC chairman, buckling under pressure, bans short selling. He knows that this is a stupid idea that does far more harm than help, but he does it anyway, to save his job. Essentially he took a pointy stick and half-blinded the market. “That’s ok”, he says, “you still have your other eye.”

Short selling is incredibly useful, and it hurts no-one. *Edit* Just like taking pictures with a camera does not steal your soul. The people who are blaming short selling for the current crises (Barack Obama, John McCain) are no more sophisticated or wise than ancient tribal shamans who, when faced with a drought, point to a young man in the tribe and demand that he be sacrificed to the sky god, so that rain may come. Well, the rain eventually comes whether they sacrificed the poor man or not, and now the tribe is weaker one member. But the rain eventually comes and everyone nods and says “Truly, Shaman is wise.”

*Edit* –
I’m serious. With their recent comments, John McCain has demonstrated that he is literally too primitive and superstitious to lead this country.

“Oh no, Mr Commander-in-Chief, we have a problem with X”

“No fear, Mr Tribe-man. Let me get my Six Demon Bag and shake it at X. That will scare away the evil spirits and all will be well. Call a press conference!”

Gah!

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