Please assure Mr. Merton that no one is holding him personally responsible
Having said that I would like to comment on that when Merton says “Just think of all the crises that haven’t happened, say with the downgrade of General Motors and Ford” it really does not mean the negative effects have disappeared, just that they have been so diluted that we do not notice it. Spreading ink in a lake instead of a bathtub will get less noticed but keep on doing it and then suddenly you will have a whole lake go ink-blue and that could suddenly turn to be even catastrophic.
Question. Are derivatives a way of pushing things forward to future generations so as to better being able to enjoy the blissful ignorance bubble?