If shorts are outlawed then only outlaws will short.
Jim “Bubblevision” Cramer and his assorted ilk have only themselves to blame. The risk of failure is inherent within capitalism. Without those risks, people will take greater and greater risks under the mistaken assumption that all is well until everything explodes. People like Cramer believe that there should be only one direction for equities, that is up. In fact their livelihoods depend on it, for a world without buyers is a world without fees.
Goldman Sachs, Citi, etc. and all the investment banks themselves make extensive use of short selling to make money. When the shoe is on the other foot and they themselves are rightfully so the targets of a short attack due to their colossal stupidity, they will cry to mommy (Washington) to get the bad men to stop because they are “special”.
You are right in that the financial system is unique and that they are merely conduits for capital. They have no productive value in and of themselves whatsoever yet get fat off the frictional costs associated with borrowing and lending.
Well said.