The SEC Short Sells Us Down the River

October 9th, 2008 11:19 am  |  by Mike Miller  |  Published in Big Government, Free Market, Liberty, Money, Politics, law, ludwig von mises  |  0

Today’s article from the Ludwig von Mises Institute discusses the practice of “selling short”, which the SEC recently outlawed, and why it’s a critical component of how the market works:

The Securities and Exchange Commission took the very drastic step of outlawing the essential financial practice of short selling in an attempt to galvanize financial markets. (The SEC recently extended at least some portions of its initial ban through October 17.) But short selling provides essential information to market participants and helps us update our expectations accordingly. By outlawing short selling, the SEC has eliminated a crucial element of what makes markets work.

Basically, the federal government (in the form of the unconstitutional SEC) intervened in the market and ended up making it worse.

Excellent article. Read it here.

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