Have you ever noticed that the people blaming the current economic mess on short sellers tend to be either A.) loud mouths who don't know what they talking about or B.) Failed CEOs turned corporate blame shifters looking for something -- anything -- to divert attention from their own miscues: people like Patrick Byrne and Dick Fuld.

In a post on his blog, Carl Icahn came up with an argument in support of short selling that I hadn't heard before:

In simplest terms, choosing not to buy a stock because you don't like the company is like refusing to be friends with a drunk. But shorting a stock is like sending a drunk into rehab. Many of these companies, drunk with money and neglectful of risk, should have been sent to rehab a long time ago.

It's possible that aggressive short-selling accompanied by a public campaign of red flags might have pushed companies like Lehman Bros. and Bear Stearns to take a look at their risk management policies before it was too late: Certainly Lehman might have avoided its fate if it had listened to David Einhorn's warnings about leverage instead of dismissing him as irrelevant and buying back huge amounts of stock.

Carl Icahn has made a few bucks over the years and wants to make some more on Time Warner (TWX). Seems like he has had to cool his heels lately upon making some compromises in his discussions with the TWX Board about his desire to sell off some assets. I think what has him so animated is Time Warner's book value which is a 1.25 multiple. Consider the following comparisons.

• Comcast (CMCS.A) has a P/B of 1.66. -- Cable
• Knight Ridder (KRI) has a P/B of 3.6. -- Publishing
• Disney (DIS) has a P/B of 2.2. -- Movies/TV/Entertainment
• Yahoo (YHOO) has a P/B of 5.88. -- Internet

If you figure that some assets do not have a 1.25 P/B then you must  figure that many holdings should be valued way over considering how much is aggregated into TWX. You can see in comparing TWX's book value to other competing companies with more segregated businesses that the multiple could be much higher; but even a small increase would mean billions in added value.

Icahn and his fellow instigators ... I mean investors, surely see this. So maybe TWX has some upside. As a shareholder I can tell you that is why I have hung on. However my entry point is far less than today's $17.20 price and I can understand why others are less patient. This will be something to watch because Icahn has to be on the less patient side as well.