Only fools, who do not understand the interplay of short selling with chart theory, stop-loss orders, margin calls, and panic selling in market downturns, think that short selling is a price discovery mechanism that leads to pricing efficiencies. In fact, it generally exaggerates price swings. Short selling is often used as a manipulative device and it should be banned or carefully regulated. The up-tick rule should be reinstated immediately. In addition, all short selling in a security should be banned when its price has declined substantially from its 52 week high.
You should read the short chapter entitled “Short Selling and Stock Market Manipulation” in my book entitled “Perpetuating American Greatness After The Fiscal Cliff”. My earlier book entitled “Homeland Security And Economic Prosperity” written after 9/11 and the bursting of the .com bubble, but while the up-tick rule was still in effect, proposed strengthening the up-tick rule to prevent bear market raids by short sellers. Subsequently, the SEC ignored the bear raids in 2007 and 2008 and ignorantly eliminated the up-tick rule. My original paper on the subject was written while I was a third year law school student in 1963. Since then SEC regulation of bear raids has gotten worse, not better.