I assume author means, people who invest in mutual funds/retirement accounts want the value to go up, thats why they bought shares. Author is saying that then the money from share purchase is then lent to short sellers who short the stocks included in those retirement accounts/mutual funds which works to lower the price of the value of those shares.

I think when it comes to preventing money from being made available to short sellers probably wouldn't improve the financial system long-term, but i see how this could be interpreted as a frustrating facet of our current system.