While big changes were going on all around us, at The Buzzer, a newspaper that has always been a creation of newsprint and ink, we found ourselves, in our own small way, in a totally new reality. We would like to say that once schools closed and quarantine began, the Buzzer staff immediately saw the value of an online issue, one that would connect community members from the safety of their homes. But this wouldn’t exactly be true. It took a few weeks, some inspiration from other online school newspapers, and a lot of texts in the group chat before we decided to go for it.

And go for it we did, but getting it done was no easy feat. Our first attempt was on a platform known as Wordpress, the go-to site for hundreds of online school newspapers. Due to our limited budget we bought one of the more basic plans, and quickly realized we couldn’t edit the HTML code or add plugins, essential aspects to making the website unique. We were eventually able to produce a paired-down version of the look we wanted, after many hours of hard work and tedious line-by-line editing of the CSS code. We got our tabs set up, designed a unique layout for each page, wrote up our content and were ready to start publishing articles -- only to find out that the fact that Wordpress does not have a privacy policy in tune with the district's would keep us from releasing our Wordpress content to the community.

After many discussions and back and forth emails with the super supportive Ms. Szymanski, Dr. Henning-Piedmonte, and Mr. Adipietro, we came to the conclusion that we needed to move on, and that Wordpress would be not a viable option for this year. Although it saddened us to leave behind something we had worked so hard on, we decided to keep moving forward. We had articles to publish and videos to share, and cared more about making them accessible than finding the ideal home for them. And so we settled on “Buzzer Blasts,” quick, short issues that we released via google sites. You’re reading one of them right now.

To be honest, none of this could have happened without the amazing editors who primed us to step up at the right moment. Ben Zion, Tia Rockland, and Sawyer Pollard led this year's staff as joint Editors-in-Chief through what turned out to be a wild year, and were accompanied by our two other senior editors, Clay Haddock and Marcus Hirt. Ben was always up early to pass out the next issue and was a constant leader on our editorial content. Despite his many obligations to Peer Leadership, which meant he could not always make our weekly lunch meetings, Ben’s steady decision-making and commitment to editing our issues "one final time" will be sorely missed. Tia never failed to keep the staff on top of our work and communicate our goals as a paper. Her leadership during meetings and enthusiasm with new ideas was truly inspiring. Sawyer, in addition to being Editor in Chief, has been the longtime layout editor for The Buzzer. His attention to detail and creative design ensured that everyone was always excited to read the latest issue. The 2020-2021 Buzzer staff thanks all three of these individuals for their leadership and hard work, and wish them the best in their futures. Without them, we could never have stepped into this uncertain time with such confidence, passion, and commitment.

The struggle to find a way to keep our newspaper alive and running got us thinking about how change happens. And not just the small story of a school newspaper going online but bigger change. Change that affects everyone and benefits everyone. Change that gets us a little bit closer to achieving a just society. Change that opens up opportunities for people who didn’t have them, and change that keeps those opportunities open. Sometimes it's slow, sometimes there are obstacles and headway is lost, and sometimes compromises need to be made. You might have to lower the priority of smaller goals (like a flashy webpage with sparkly graphics) to focus on and achieve what’s most important. But progress does happen. Goals are reached. Movements are successful. All that matters is constant effort, creative thinking, and hard work from those pushing for change. Because with this dedication, anything is possible.

For Merton, his undergraduate experience at Columbia, was that “even for an engineer, you’re required to broaden your studies in the liberal arts and in the humanities…[Columbia] let me take as many courses as I wanted.” Merton ended up taking many graduate courses, and got a “very deep, very rich” education there.

He then studied for his PhD in Applied Mathematics at CalTech where he learned the value of “play”: “when you are a student and you are in class, by and large your education is passive; you learn and absorb things, but it’s [mostly] passive. If you’re going to do a PhD, you want to do research, and create something that never existed before, so that is a very different process. You have to actively participate in your field. And what I learned in CalTech was that they let their students play. So I spent a lot of time playing with the subject, something I didn’t know how to do [before].”

Although his teachers encouraged Merton to think creatively, he admits that his advisor thought he was “crazy” when he decided he wanted to shift from applied math to economics. Although Merton “loved using math and its elegance and power to solve things,” he realized at CalTech that he wanted to pursue economics instead. He believed economics to have the power to “affect the lives of millions of people.”

It was then at MIT where he received his PhD in economics and then Harvard that Merton produced some of his most famous research, but with each new academic environment one thing stayed the same: his passion for experimentation. Of his initial research with Paul Samuelson, Merton says, “I spent hours fooling around and trying to think about how to solve intertemporal optimization of lifetime consumption and investment decisions. I found a lot of blind alleys, but I played with it.” As a graduate student at MIT, he was “fortunate to solve some interesting problems, challenges, and come up with some new things”--so here’s an interesting problem: How do you even begin to respond to a pandemic?

On the COVID-19 Crisis

Although it is near impossible to predict the exact nature of crises -- such as the loss of life, amount of damage, and economic impact -- one thing is for sure: “making radical financial decisions is never really a good idea.”

In response to COVID-19, Merton offers this: “We have enormous shocks as a result of being socially distanced and having to shut so many things down. When you have a shock of that magnitude, you don’t start working with long-term policies and you have to give people confidence. You want to minimize any long-term damage.”

Merton uses an analogy to describe the circumstances of this situation: “If you have a fire in the house, and the firemen come, their first order of business is to get all the people out safely. The second order of business is to get the fire out and try to preserve the property or the damage; and to do so sometimes they have to break windows and doors and do damage, but if that’s necessary then you do it.” After the fire is out and all of the people have been saved, rebuilding is necessary, but that rebuilding is in part because of the fire but it is also due to the damage done that was necessary in the moment to save people and stop the spread of the fire.

Merton adds: “there are times when we have to do things in the short-term which for a longer term policy we’re going to have to undo or correct.”

Merton stresses the importance of not confusing “what has to be done in the immediacy of a crisis and what the priorities are in terms of short-term ways of dealing with crises. If you have the luxury of different ways of executing that short-term process then you try to do that with the least damage that will have to be repaired for the long term.”

However, these short-term policies often require reconstruction and money, and Merton clarified that: “the government is this institution that we have created as people to better organize the way we live our lives as a society,” and that the funding that many people expect the government to dish out “has to come from somewhere -- and ultimately it has to come from the people.”

Understanding the Nobel Prize Winning Black-Scholes-Merton Model

The Black-Scholes-Merton model elucidates that a higher volatility, or an increased fluctuation and variance in a stock price, can drive the value of an option stock up. In a recession, the volatility of stocks go up, because volatility is the measurement of how far a current price deviates from mean past prices. Options are a way to trade the insurance of a stock, so if you were to insure a stock for a certain amount over a certain period of time, and that stock becomes more volatile, more risky, then the option is worth more.

The Black-Scholes-Merton formula is at play in our current economic state, as we are in a “very very volatile period,” and so the price of options is very high. Merton proposes the example of airline stocks to clarify this theory: “Let’s say that airline stocks had one volatility last year, just some level, and let’s say that it could cost a certain amount to ensure the cost of an airline's stock. If that same airline stock is twice as volatile this year, it’s going to cost you a lot more to ensure that same value because it’s more risky.”

The volatility of airline stocks could be twice as volatile for multiple reasons: “First, [people] are looking at the future of earnings/the dividends that they can receive as shareholders, and those have gone down because people are not flying and because the economy is getting worse so [people] are not going to spend as much on airlines. Therefore, the profitability of the airline goes down, which is a reason why the airline stock would go down.”

“Secondly, because the airline stock should become more risky, the acquired expected return--how much shareholders are willing to earn and expect to earn in order to be willing to buy stocks--has gone up. This brings the value of the stock down, so those are two reasons why the stock would go down. However, to buy insurance on that stock, because it’s more risky, is worth more.”

Merton concludes: “If two stocks cost the same amount, but one has a higher volatility, then you will pay more on insurance for the stock that has the greater volatility...Right now option prices are very very high. So the fear index -- the implied volatility for market price options -- is very high as well. However, there is more than one input to the valuation of the option, such as interest rate as well as other terms.”

On Growing up in Hastings

Interestingly, Merton’s own childhood was in many ways shaped by a government response to a crisis.

When Sputnik was sent to space in 1957, there was a heightened sense of apprehension and concern in the United States, and a belief emerged that “somehow Russia had gotten way ahead of the US in science, math, and engineering.” As a result, the US government passed the National Defense Education Act, which aimed to support education, particularly in secondary high schools in the areas of math and science. Reflecting on this, Merton emphasized the importance and the benefits of “putting materials, resources, of the government at the level of schools -- not just a handful of schools -my experience was not not special in the sense that somehow Hastings won a special award so it was treated as some kind of magnet school, it was available largely throughout the country. How much that helped me, I can never measure, but for sure it was a very important thing... it’s good fortune that the Russians put Sputnik up at the right time.”

In his high school career, Merton had “wonderful teachers” and was able to take many challenging courses such as Advanced Biology, Advanced Chemistry, as well as an advanced physics course created by MIT that was centered towards high school students, called PSSC. The teacher that taught PSSC, Don True, had even been paid to spend the summer at MIT before he taught Merton’s class, in order to learn how to teach this advanced course. In his four years of high school, Merton had also built in 5 years of math classes.

One of the most profound lessons that Merton learned from his mother in his childhood is one that he has carried with him throughout his life: “First show them that you can do it their way, so that you earn the right to do it your way.”