When SEC chairman Chris Cox announced an "emergency" rule to make short-selling in certain financial stocks more difficult, the reactions basically fell into two categories: 1.) How stupid: that will create an artificial price increase not justified by fundamentals. 2.) How stupid: if that's a legitimate rule, why not apply it to all companies?

Continuing on the theme of hypocrisy and scapegoating, The Wall Street Journal reports (subscription required) that Cox is set to extend the emergency rule to include "insurance, housing-industry and a broader range of financial stocks."

In other words, let's protect all the stocks that deserve to go down from going down.

I've spent the past few hours trying to figure out who exactly these "emergency" rules are protecting. Why do we need to make a special effort to curb short-selling in companies that are fine, as their defenders insist? Are they protecting the longs? But if these companies are in such great shape and the shares are heinously undervalued because of short-selling, wouldn't that present a great opportunity for investors to go long and profit from the long-term tendency of stocks to move to reflect their intrinsic value? Heck, where are the buyout firms that could be scooping up these undervalued victims of market manipulators?

What's so pathetic about these SEC rules is that they're a giant waste of time, essentially trying to micromanage day to day price swings in companies with futures that are very much up in the air -- time that should be used to improve the poor, and possibly misleading disclosures at many of these firms that led to so much pain for investors.