Federal regulators appear to be on a bit of a lawless streak, making up new rules as they go in responding to the crises du jour.

The trend began back in March as the Federal Reserve and the Treasury Department joined in arranging a fire-sale buyout of Bear Stearns. At that time, the Fed suddenly and without warning changed its decades old practice of opening its discount window only to commercial banks.

But the move to “emergency” rulemaking accelerated last month when Treasury Secretary Hank Paulson demanded “additional emergency authority” to limit temporary disruptions.

Now the SEC is getting into the act as well with its “emergency order” restricting short trading — not in general, but specifically in the shares in Fannie Mae and Freddie Mac, both of whom are protectorates of the federal government anyway. The SEC’s supposed target is “unlawful manipulation,” which is illegal already (first by definition — it’s unlawful — and second by the fact of it being manipulation).

All this on-the-fly regulating smacks of a banana republic. Normally in a functioning democracy, lawmakers and federal agencies craft rules through a deliberative process, and those rules apply prospectively across the board. When the government acts through orders rather than legislation or established administrative procedurees to identify emergencies and bogey men, and then seeks to outlaw their practices with hastily drafted decrees — well, that’s when the market makers, who depend on freedom and the established rule of law, should start to worry.

It’s not protection, but something closer to the opposite.