While it may seem like all these "bets" on the stock market, including short selling, are further pushing us into an economic black hole, short selling is a valuable function in market values. It's a measure of investors' confidence in a company. If investors do not have confidence that Financial Institution X (as an example) has enough liquid (available) assets to remain in business, they express that lack of confidence by short selling Financial Institution X's stock. They are saying, in effect, "Hey, this company is really doing very badly and I believe they will suffer losses."

While concentrated efforts to short sell a company just to drive their stock prices down is considered market manipulation and is illegal, outright preventing short sales altogether is just as much of a market manipulation. A financial institution who is trading now at, say, $10 per share may only be valued that high because of the short sale ban; in reality the financial institution could very well be nearly bankrupt. The short sell ban allows for artificial inflation in a company's value in many cases, and that artificial value will only last as long as the ban is in effect.

This is blackmail and artificial market strength by the SEC!