The root cause of credit crunch and economic downturn

Ask even a common man and people are well aware that it is the game of derivatives that has been the root cause of all this economic problem worldwide.  Yet no government of any country from anywhere in the whole world has even spoken about creating measures that keep a check on these derivatives so that the volatility in the marketplace can be removed and these economic problems can be stopped even before they are born.

I believe it is the whole system which is in fact by itself infected by its own lure for such complex financial instruments in such a way that it cannot do without them even if it has to collapse altogether for its own lure for these complex financial instruments, the derivatives and the credit default swaps. Till our whole system is infected in this way, we will keep witnessing such suicidal incidents such as bankruptcies and counter-bailouts to prevent them from dying and the states such as california and all countries, big and small, getting gripped in by severe financial crisis of extreme magnitude, something that never happened ever in these history!