I hear all of the arguments: The longs can have it both ways, so why not the shorts. The rule is outmoded by penny trading. The new studies show it doesn't matter. The SKF is a fitting way to be able to be sure that you can get quick negative trading done on the banks.

Are these really the imperatives?

Of course, I hear the other argument: They are all in trouble so they should go down. They are all in the same boat. Does anyone really believe that? Does anyone really believe that every single bank is run by idiots with worthless common stock?

I am adamant that the shorts/purists are simply not cognizant of the history of why we put in these rules. They were put in not to make it so trading was less efficient and now it can be more efficient. They weren't put in because they wanted to make it so the longs could make money and the shorts couldn't.

They were put in because it was too easy for the shorts to destroy the common stocks and, therefore, the companies in finance. It was too easy to stop capital from flowing into the markets and destroy their functions. The government held hearings and recognized that the shorts had sown fear and that it was not in the national interest to sow fear, collude to bring down stocks and wreck the capital markets. I am sorry, but that's why they put them in.

Has anything really changed in terms of what the goal was? Has anything changed in human nature? And as far as the slippery slope arguments about penny trading, oh please. The first week in law school you learn the irrelevance of that argument. It is not proof of anything. There are simply competing agendas: the rights and privileges of the short-sellers versus the interests of the government to have an orderly capital markets system that is functional and allows capital to be raised. You tell me which is more important for the nation.

It is also no excuse that "throughout the world' the same thing is happening to bank stocks. Remember my argument: I am not saying that all the banks should be preserved and I am not saying that there aren't banks that shouldn't be seized. I am saying that it is irrational and empirically obvious that not all banks are insolvent but they trade as such because it is so easy to sew the panic and fear that the legislators in the 1930s saw happening. You could argue they weren't sophisticated but that would be wrong, too.

Joe Kennedy was the first Securities and Exchange Commission chairman. He favored the rules because he was one of the big short-selling winners and he knew how effective short selling was in undoing the stock market and the banks. In short, he wasn't a rube as so many of the short sellers/purists imply when I take up this cause.

The government also knew that excessive margin creates an untenable amount of volatility, so it gave the Federal Reserve the power to regulate it. The ProBear ultra funds and their ilk are simply ways to take advantage of the lack of an uptick rule and exploit a hole in the margin rules. The impact is the same as the 1930s. (See Eric Oberg's excellent, well-reasoned pieces on this Web site if you disagree.)

Penny trading? OK. Simply say that the next short has to be done 10 cents up. Not possible because of the "way stocks now trade?" Then bring back the old way. I don't care. The simple fact is that we are in an emergency and I think we should retreat to what worked so well for so long and forget about the academic studies done during the greatest bull market of all time. They are irrelevant.

Let me leave you with a realistic thought about this subject. In 1990, Morgan Stanley's options desk showed me a way to get around the uptick rule. I could buy puts and common stock simultaneously and then bang down the common stock so quickly as to scare the buyers and create a vacuum down where I would then sell the put.

It was one greatest ways to make money on the short side I had ever seen. I could go in and buy thousands of puts -- position limit -- and a like amount of common and just, guns blazing, blow weaker stocks apart. I remember destroying Woolworth and Dayton Hudson, laying them to waste. Others got into the game too. It was totally legal.

Then one day they told me to cool it. The regulators didn't like it, too easy, too destructive to the capital markets, too unfair. I argued mightily that the longs could do it, that my rights were violated, my livelihood. I said that my targets were weaker firms that should be going out of business anyway. I said that the people in government who wanted to stop me were playing unfairly and "propping up" stocks. I took it to the highest levels and went to politicians on it. I was adamant about my rights!

And the whole time I knew the truth. It was just such easy pickins. The buyers figured why would some seller be that aggressive if something wasn't wrong. The buyers lived in fear that "the whale," as I was known at the time, would wipe out their stocks so they sold right along with me. I minted money. Married puts were as right and as fair as fair could be. Except that they weren't at all and when a bunch of us would come flying in at the same time we could really take stocks down fast, much faster than they could go up. Remember, this was before you could put a credit default swap on to win both ways.

So sure, I get it, protect the rights of the shorts. They need protection like the longs. Blah blah, blah. You are reading the first guy who went to bat for these rights. But never forget that I knew why I wanted them.

Because it was just a brilliant way to destroy stocks for profit.

Sorry.

I know the truth.

One last thought as we wipe out the banking system because common equity and not Tier 1 capital is the shorts' best friend. Just wait, in a few more points the SKF -- the most powerful weapon known to destroy bank stock capital I have ever seen -- won't matter.

There won't be any common stocks left to drive down.

Then, I guess, like President Bush on that aircraft carrier, we can proclaim "Mission Accomplished."

Random musings: I see the senators are finally getting around to asking who is getting the American International Group (NYSE: AIG) (Cramer's Take) money. I told them a year go: European banks, because the deals were orchestrated by Joe Cassano in London. The senators remain so clueless.

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Wells Fargo.