August 18, 2009
Short-selling has many problems, and its destructiveness being one of them.
But here is an actionable problem: borrowing stocks should result in a fee being paid. If I had a stock certificate and lent it to an unknown person (no matter how small the risk) a fee should be paid to me. That cost is forgotten and avoided in short-selling.
Placing a fee on borrowers of stock (a fee times amount of stock, times the amount of time borrowed, plus any added risk incurred would reduce this destructive practice.