The fears most people have about shortselling are baseless and stem from a lack of knowledge about how it works.
The *rational* fears of regulators and coporate America works like this: Massive, concerted selling, at the right moment and in the right instruments, could trigger a cascade of stop-loss orders and options rebalancing sales creating a downward chain reaction.
Mitigating this is the sheer size of the markets, their diverse and resilient nature, the tremendous paper trail that would be left by such an effort, and the various circuit breakers built into the system after the 1987 crash.
It *would* have been rational for the bad guys to short S&P futures/buy index puts discreetly and in smallish lots through a wide network of brokers scattered around the world. That would have been profitable and hard to trace. But it would NOT in an of itself CREATE a significant amount of pressure on the markets. They were already weak for "real" reasons anyway.
Happy trading!