My good friend Michael Says that the Rick Steves Travel Guide is a must to find the hidden local places.  I need to check them out.

We’re all still in the clouds and delighted with the friendship, support, and success of The Life Cube, 2012. I want to make sure to share pics from the TLC art installation at Burning Man as they come in.  The reception to this project exceeded beyond all expectations, and I am eternally grateful to all who helped, offered encouragement, and made my dream a reality.  There is no way I can really express my happiness and gratitude. With love and appreciation, skeeter #TheLifeCube #Burningman #happy #artatburningman #bm2012 #skeeter #blackrockcity #TLCV2 #BurningMan

Dear friends & supporters: I can not begin to describe how phenomenal the experience as an artist at Burning Man was this year.  Over 100 people, and so many more friends and family donated time, money, and equipment to make this dream a reality. The Life Cube was everything I envisioned a year ago.  We spent much of the past year working on design, planning, recruiting volunteers, getting the word out to artists about the Tapestry Wall, fund-raising, logistics, identifying vendors, and obtaining materials, supplies, tools, and equipment.  We spent the summer months in Reno on the pre-playa build and a lighting plan.  We had a truck driver with a 53 foot flat bed, 2 panel trucks, and assorted vehicles bring everything to the Black Rock Desert a week before the event.  The playa construction and assembly involved over 25 people. We completed construction on Sunday night. When the gates opened, 1000s of people came and interacted with the Cube.  They climbed, wrote their goals, dreams, aspirations, and wishes on wish-stick postcards.  They drew on the write-boards.  We had over 100 artists from around the world submit 2×2 foot panels that taken together created an enormous tapestry wall.  We had on site muralists devote days to adding more fantastic art to the Cube and a gallery of photos of Burning Man over past years by nine major photographers that offered an historical perspective of the festival.  A friend introduced sacred geometry into the art. And at the end of the week we burned it, in a fiery ceremony attended by many thousands of people who returned to say goodbye to the Cube.  This was not a life-changing event, but it was most definitely one of the most amazing weeks of my life.  Huge thanks and gratitude to all of you who helped in the design, funding, build, burn and clean-up efforts.  Your friendship and support was invaluable. I will post as many pictures as possible.  And if you took photos or video, or see pics of the Cube, please email a link or share them.  There were so many photographers and so much video taken — as it comes my way we will post them.  If you are on facebook, you can see more at www.facebook.com/thelifecube Thank you all! skeeter Artist, The Life Cube #lifecubeburningmanthelifecubeburningmanartburningartskeeterblackrockcitybrccargocultlifecubewishcubebm2013brc13indiegogo #lifecubeproject #lifecubeproject #lifecube #lifecube

The Life Cube V2 Possible Design #TheLifeCube #burningmanburningman #artatburningman #skeeter #BM2012 #burningman2012 #lifecube #artatburningman #bm2011 #burningman2011

#TheLifeCube #burningmanburningman #artatburningman #skeeter #BM2012 #burningman2012 #lifecube #artatburningman #bm2011 #burningman2011

Macha Levinson, Director for Energy at the World Economic Forum, 1991 – 2003 Published Huffington Post 3/4/2011 Oil prices started to surge even before upheaval in the Middle East had spread to oil producing states. Now the specter of civil war in Libya is intensifying fears of spiraling prices, shortages, pipeline stoppages and, above all, of contagion. This stark reminder of the impact of oil on the global economy should bring a timely dose of reality into the U.S. energy debate. That debate is distorted by the glaring disconnect between the way we use energy and the way we talk about it. The talk is only about the future. It’s about clean technologies and tackling climate change. It’s about investment in energy efficiency and in bio-fuels. But the way we use energy is still mired in oil, which together with natural gas and coal, make up more than 85 percent of U.S. energy consumption. That reliance on fossil fuels is likely to increase over the next two decades. But, oil is not part of President Obama’s energy future. In the State of the Union address, he called oil “yesterday’s energy.” It has been exorcized from the energy vocabulary unless connected to the words “spills” or “foreign dependency.” It is also in solitary disgrace. All other types of energy pass muster. “Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all,” said the president, slightly contradicting an earlier vision of an economy without fossil fuels. The president’s words correctly echo mounting sentiment that has tipped opinion towards clean or cleaner energies. We can now imagine a future without oil, and the experts agree that future may be only a few generations away. But as today’s crisis shows, that still leaves a long time to worry about adequate oil supplies at stable prices. It is the nasty addiction to foreign oil (way over half of US consumption) that makes it a major foreign policy issue and one that the president should address quickly before the U.S. is again pilloried for supporting non-democratic regimes. At a time when the region with the world’s largest oil reserves is in political turmoil, the U.S. needs to talk clearly about its energy imports and how they fit into the energy security paradigm It must be prepared to answer for the politics of the oil-producing countries that supply the U.S. and its allies and deal with the consequences if the politics blow up. This will not be an easy task. The geopolitics of oil is hard to explain, but the picture is not all black. The U.S. does import oil from some democratic countries and would clearly prefer not to deal with disreputable or unreliable suppliers. It has stood up for the interests of the NATO allies when Russian gas cut-offs to Ukraine threatened their energy routes. It also actively supports pipelines that avoid Iran or Russia, although it does rely instead on what may be only temporary allies in Central Asia. But extricating ourselves from foreign oil will take more than a pledge to kick the habit. It raises some tough political and moral questions that must be confronted. Oil exports have become the lifeline for many developing countries, posing threats to traditional industries as well as to the environment, but bringing economic boon. The U.S. currently benefits from the oil rush in Africa where Nigeria is now the fifth largest exporter of oil to the U.S. and the U.S., in turn, is by far Nigeria’s largest market. But it is also vulnerable to charges of encouraging oil exploitation in developing countries where standards are much laxer than at home. As the U.S. imports increasingly more oil from this continent, it will have to find the moral high ground in the face of glaring headlines about corruption and theft. And if we look into the really distant future and imagine a world with clean energy and without oil, could exporting countries start demanding compensation for lost income? Ecuador, one of Latin America’s largest oil producers, which sends about 60 percent of its oil exports to the U.S., recently agreed with the United Nations Development Program to hold off drilling in the Amazon rainforest in return for creation of a trust fund in the amount of half the foregone oil profits. The money has yet to be collected, but the principle has been established. Other countries may want to follow suit. Could the idea of paying for keeping oil in the ground gain traction? Whether the U.S. likes it or not, foreign oil will remain part of energy security for the foreseeable future. With a global oil market fired by furious demand, pressure and cascading geopolitical unrest, the U.S. must set forth its thinking about “yesterday’s” fuel or risk being lumped together with the oil dictators of this world. It can no longer ignore the contradiction between the domestic discourse and policy overseas. (Disclaimer: Masha Levinson is also the mother of my very good friend Marissa Levinson) Original Post at http://tinyurl.com/mlevinson

I have been offered all these fancy cards, and can tell you that both Amex and Visa need a lot of work on their costomer service.  Selling something as exclusive is good if you deliver something of value.  Fact is that both companies call centers are sub-standard and their concierg services not that good.  Both do offer special deals on hotels, but the cost generally does not justify if you are willing to call the hotel yourself or have a god travel agent.  Below is a posting of the comparison of Amex Black vrs Visa Black.  You probably should compare Platinum too — but overall, you pay for prestige, and their service is only satisfactory. American Express Centurion vs. Visa Black Card American Express came up with an excellent concept for a credit card for those heavy spenders and Visa wanted to copy it, but I think they failed miserably. American Express USA has the best service of any credit card company I have seen, I have usual credit card and they have been great so I don’t even have a clue about what they would do for the Centurion customers but here is a small and funny comparison. Spending: AMEX Centurion: In order to keep the card you have to spend at least $250,000 a year. Basically buying a car a year, and you have to pay it within the agreed period Visa Black Card: Credit history sets your limit, so if your not a Billionare it will probably be $5000. Exclusivity: AMEX Centurion: You must be a current American Express card holder with great credit history. And going over the limit is never an issue in your spending. Visa Black Card: Barclays bank mentioned only 1% of the population will be able to get this card. I doubt it. Concierge Service: AMEX Centurion: You command and they serve, I don’t think I have ever heard AMEX refuse a customer request. If you go shopping they arrange for a personal shopper at high end boutique. I wonder what would happen if you asked for a bunch of penguins to be delivered to your house. “No” is not a word they would utter. Visa Black Card: It seems they have gotten on board with a 24 concierge service to do everything you want. Vacation bookings, Game Tickets, Shows, Information on the “In” places in different cities, restaurant reservations and more. Extras: AMEX Centurion: Your a member of Sony’s Concierge service, meaning you get access to all of Sony’s products before they his the market. You can get car extensions for your kids or family and in any color you want. Visa Black Card: The card is made out of Carbon so it doesn’t wear. Also members get 1% back on purchases that can by used for travel or airline cost.

American youth for vandalism, punishment for infraction of Singapore law is carried out swiftly and publicly. Educating people about the effects of their choices does, of course, affect behavior, and it takes time for cultural attitudes to change. A complete programmatic attack on crime would include the use of both formal punishments and rewards as well as education and consensus building among the population. Properly carried out, such education and consensus building can tap social rejection and approval as additional (and decentralized) sources of punishments and rewards to reinforce sanctions against criminal or otherwise undesirable behavior. As another illustration of the workings of the sociological model, consider the current debate over the causes of homelessness. The very use of the term “homeless” 11 Sykes (1992, p. 3). Jensen and Meckling 21 1994 suggests no choice on the part of street people (who are therefore victims of the system); it also carries little or none of the social disapprobation of “vagrant,” a now unfashionable label. This change in language and attitudes reduces the decentralized sources of social or cultural punishment for being a street person—again something the REMM model predicts would result in an increase in this socially undesirable behavior. New York City now spends in excess of a half billion dollars a year on subsidies for the homeless, and the problem shows no signs of going away even with the improvement in the economy. (And the “de-institutionalizing” of the mentally ill, a common explanation, by no means accounts for the vast increase in the numbers of street people.) The sociological model suggests that if an individual’s income and wealth are small, it is entirely due to cultural factors, environmental adversity, or bad luck—not to conscious effort, the choice of leisure over work, the choice of a particular type of work, or the failure to invest in learning. Therefore, “justice” requires that we confiscate the wealth of the more fortunate to recompense the unfortunate. Of course, the higher the recompense, the more attractive it is to be poor, and REMMs will respond by taking more leisure, by choosing occupations in which employment is more unstable, and by investing less in learning. The REMM model predicts that if we make the payoff high enough, we can attract an arbitrarily large number of people to become poor or unemployed—or at least to meet the established criteria for those programs. This describes important aspects of our welfare and unemployment systems. Politicians, bureaucrats, and special interest groups understand that public policy choices are affected by the concept that individuals are responsible for their own fates. Strong popular support for the principle that individuals ought to be rewarded or punished in accord with their own behavior, means that measures that aim to redistribute wealth, or rehabilitate criminals rather than punish them, would encounter strong opposition. But resourceful politicians and others who want to put such measures into Jensen and Meckling 22 1994 effect can neutralize public opposition by persuading people that everything we do is forced on us by our cultural environment—we are social victims, and thus neither our behavior nor our status is a product of deliberate choice. By undermining the link between choice and consequences, they can overcome the resistance that stems from beliefs that individuals are responsible for their own behavior. In addition, individuals constantly face a conflict when attempting to help others who are experiencing difficulty, especially those related through family or other ties. The conflict is between the desire to ease or eliminate the difficulties of others through gifts or charity and the reluctance to distort the incentives of people to take charge of their own lives, say by investing in education and making other efforts to improve their condition. All parents face such trade-offs when deciding how much help to give their children, and the choices are not easy. The short-term pain associated with denying help to a loved one is very difficult to bear. But casual observation, together with evidence of the futility of various social programs, seem to indicate that people systematically underestimate the counterproductive long-run effects on individuals of actions that we take to shield them from the consequences of their own choices.12 The Sociological Model and Marxism A discussion of the sociological model would be incomplete without touching upon the use of that concept by Marxists, socialists, and other groups around the world. Marxist politicians understand that the sociological model is the foundation for the centralization of power. Marxism has received wide support in Europe. It has also had substantial support among the Catholic clergy and American academics. Recent evidence on the widespread failure of Russian, Eastern European, and other economies dominated by Marxist thought has revealed the shortcomings of this view and diminished, but not 12 The “tough love” movement and twelve step programs such as AA for treating substance dependence are designed to provide help while insisting that individuals maintain their personal responsibility for their fate. Jensen and Meckling 23 1994 eliminated, support for it. Ironically, as many formerly socialist Eastern European and Asian countries are moving toward capitalism, the U.S. is moving toward more socialistic regulatory and political policies. Socialism is supported by a philosophy that idolizes the state. The urge to subordinate the individual to the organization has ancient roots going back at least to Plato. In portraying his ideal state, Plato says: … [T]here is common property of wives, of children, and of all chattels. And everything possible has been done to eradicate from our life everywhere and in every way all that is private and individual. So far as it can be done, even those things which nature herself has made private and individual have somehow become the common property of all. Our very eyes and ears and hands seem to see, to hear, and to act, as if they belonged not to individuals but to the community. All men are molded to be unanimous to the utmost degree in bestowing praise and blame, and they even rejoice and grieve about the same things, and at the same time… Nor should the mind of anybody be habituated to letting him do anything at all on his own initiative, neither out of zeal, nor even playfully. But in war and in the midst of peace—to his leader he shall direct his eye, and follow him faithfully. And even in the smallest matters he should stand under leadership. For example, he should get up, or move, or wash, or take his means … only if he has been told to do so. … In a word, he should teach his soul, by long habit, never to dream of acting independently, and to become utterly incapable of it.13 Plato’s ideal state is an example of the most extreme anti-individualist position, one which makes the organization itself the ultimate end. The state is treated as a living organism; it is the overriding value. Individual purpose is not only unimportant, it is an evil that must be stamped out. Plato’s views are not very different from those of most Marxists. The role of the individual poses a dilemma for Marxists. Avowed Marxist states around the world such as the former USSR, China, and Cuba display an attitude with respect to individual citizens that is close to Plato’s utopia. Party doctrine denounces individualistic motivation and invokes the common good. In intellectual discourse, Marxist theorists press for an organizational or social class approach to the study of society. In Marxist theory, the 13 Plato, Laws 739c, ff., and 942a, f, as cited by Karl Popper (1950, p. 102). Jensen and Meckling 24 1994 worker and the capitalist play out their roles regardless of the costs and benefits of their actions. Capitalists are what they are and do what they do because they are capitalists, and so too for workers. In the Marxist model, individuals do not evaluate, choose, or maximize; they behave according to the sociological model. The sociological model is devoid of prescriptive content, yet it is commonly used for normative purposes. If humans are not evaluators (they only play the roles given to them by the culture), it is meaningless to talk about making people better off. While Marxists reject Western economic tradition of considering the individual as the basic unit of analysis, they also express great concern for the plight of the less fortunate and make much of concepts such as class conflict and exploitation. Thus, these concerns for the welfare of people (primarily the workers or underclass) exhibit an obvious and fatal inconsistency. To repeat, unless we attribute preferences to the individual, language that describes differences in an individual’s wellbeing makes no sense. Notions like equality and justice are popular among those who employ the sociological model of humanity, but such ethical norms are not internally meaningful because they imply that individuals care about their condition; that is, that they are evaluators, they experience envy, and they choose. Furthermore, if the state is all that matters, as Marxist doctrine maintains, concern for the plight of the individual is irrelevant at best and can be inimical to the general good. Concepts such as exploitation and conflict can be used in a group context to refer to more than one individual, but such language has meaning only in terms of individuals. Organizations cannot be exploited any more than machines or rocks can be exploited. Only individuals can be exploited, can suffer, can make war; only individuals can be objects of compassion. Organizations are purely conceptual artifacts, even when they are assigned the legal status of individuals. In the end, we can only do things to and for individuals. Jensen and Meckling 25 1994 7. The Psychological Model of Human Behavior The psychological model is a step up the evolutionary ladder from the sociological model. Like REMM, humans in this model are resourceful, they care, they have wants and drives. But the individual’s wants are viewed essentially as absolutes that are largely independent of one another. Therefore, substitutions or trade-offs are not part of individual human behavior. In effect, the individual is said to have “needs” in the sense of that word which we have already rejected. Perhaps the best-known formulation of what we call the psychological model was provided by A. H. Maslow. “Human needs,” wrote Maslow in 1943 (p. 370), “arrange themselves in hierarchies of prepotency. That is to say, the appearance of one need usually rests on the prior satisfaction of another more prepotent need.” Maslow’s needs, in order of their “prepotency” from high to low, are physiological (food, water), safety, love, and self-actualization. In contrast to REMM, the individual in Maslow’s hierarchy of needs model is unwilling to give up any food for any amount of safety until his or her food needs are satisfied. Only after the food needs are completely satisfied will he or she be concerned about safety. What Maslow and his followers have done is to confuse two entirely different issues: how an individual allocates resources among alternative goods at a given level of wealth, and how that allocation pattern varies as an individual’s wealth rises. Maslow himself, in the latter part of his famous article, qualifies his early statements that deny substitution. He argues that he did not mean that literally 100% of a person’s food need had to be satisfied in order for him or her to begin to satisfy the safety needs, and so on.14 Although most of Maslow’s followers have ignored his 14 “So far, our theoretical discussion may have given the impression that these five sets of needs are somehow in a step-wise, all-or-none relationship to each other. … This … might give the false impression that a need must be satisfied 100 per cent before the next need emerges. In actual fact, most members of our society who are normal, are partially satisfied in all their basic needs and partially unsatisfied in all their basic needs at the same time. A more realistic description of the hierarchy would be in terms of decreasing percentages of satisfaction as we go up the hierarchy of prepotency. … Jensen and Meckling 26 1994 qualifications, these latter statements show him moving toward the notion of substitution and the income elasticity of demand, a relationship known to economists for many years and incorporated in REMM.15 Moreover, ample evidence of human behavior contradicts Maslow’s hierarchy of needs model. We see astronauts, skiers, and car racers accepting less safety in return for wealth, fame, and just plain thrills. Poets, artists, and gurus go without material comforts to devote their time to contemplation and art; and, to us, these pursuits sound closer to self-actualization than physiological goods. The psychological model, like the sociological model, is not satisfactory for describing the behavior of individuals in the study of social phenomena. Yet there is some content in Maslow’s model. His ordering of wants probably corresponds to how most people would allocate a $1,000 increment of wealth on expenditures at increasing levels of wealth. Wealthier people will tend to spend less of their additional wealth on goods satisfying physiological wants, and more on each of the categories of goods higher in Maslow’s hierarchy.16 Nevertheless, inconsistent with Maslow’s model, individuals at any level of wealth are willing to sacrifice some amount of any good for sufficiently large amounts of all other goods. Thus, while Maslow’s ordering of categories of human wants tends to describe how expenditures increase with increased wealth, it is neither a hierarchy nor does it describe needs. It is difficult to infer much else about social behavior from the hierarchy of needs model that is not trivial or false. The psychological model predicts that if the cost of any good rises, the individual will reduce outlays on whatever is the highest As for the concept of emergence of a new need after satisfaction of the prepotent need, this emergence is not a sudden, salutatory phenomenon but rather a gradual emergence by slow degrees from nothingness.” Maslow (1943, p. 388-9). 15 The income elasticity of demand describes how an individual’s consumption of a good changes with a given change in income. It is the percentage change in the quantity of a good demanded by an individual divided by the percentage change in the individual’s income (holding all prices and quantities of other goods constant). 16 Economists call such goods “necessities” and “luxury” goods. They are defined by their income- or wealth-elasticity of demand. Jensen and Meckling 27 1994 ranking good he or she currently buys, a behavioral reaction clearly contradicted by actual consumer behavior. When the price of one good rises relative to other goods, consumers react by reducing purchases of the good whose price has risen, not the purchases of goods that are highest on Maslow’s list. Once substitution is ruled out, the individual’s attempt to maximize by reconciling wants with means is largely ignored, and attention focuses instead on the study of individual wants (or classes of wants). Examples from the field of organizational behavior (OB) are numerous. One general problem (an extremely important one) is how to get employees to be more productive. The general answer under the psychological model is to reward them by satisfying their needs. The OB literature does not generally recognize that the employer’s problem is one of designing an overall employment package that takes into account the potential for trade-offs. Instead, each good that the employer can provide the employee is considered in isolation. Job enrichment and the quality of the working environment are examples. More of each is always taken to be better than less, and not only is the optimality criterion seldom applied to determine the correct level of job enrichment or quality of the environment, optimality itself is seldom discussed. The prevalence of Maslow’s model in the behavioral science field is, we believe, a major reason for the failure of the field to develop a unified body of theory. Theory erected on the basis of individuals who are driven by wants, but who cannot or will not make substitutions, will necessarily consist of a series of independent propositions relating particular drives to actions and will never be able to capture the complexity of human behavior. Jensen and Meckling 28 1994 8. The Political Model of Human Behavior While resourceful and, in a certain sense, evaluators and maximizers, individuals under the political model evaluate and maximize in terms of other individuals’ preferences rather than their own. Unlike REMM, the individual is a perfect agent seeking to maximize “the public good” rather than his or her own welfare. It is important to distinguish between altruism (that is, a willingness to sacrifice some of one’s own goods, time, or welfare for the benefit of others) and the political model. Altruists do not behave according to the political model. Since they have their own preferences, they cannot be perfect agents. A perfect agent is a person that will maximize with respect to the preferences of the principal while, if necessary, denying his or her own. Perfect agents would be equally satisfied working to save the whales, feed the poor, make computers, or care for the musical interests of the rich through the local symphony orchestra at the bidding of their employers. Altruist that she is, Mother Teresa’s devotion to caring for the poor of Calcutta does not make her a perfect agent. It is highly doubtful that she would agree to (or effectively) represent the interests of someone who wished to save the whales, or to make computers. Like all REMMs, she has her own preferences and will exercise her own choice over whom she devotes her time to helping. The logic in which the political model figures so prominently is simple, though it will not withstand careful scrutiny. Whenever individuals acting on their own behalf will not bring about the “desired” outcome, government must take a hand. If consumers might be misled by deceptive advertising, have government regulate advertising. If sellers might market products that are harmful to consumers, have government regulate consumer product safety. If consumers might not understand the terms of lending contracts, have government regulate the language that can be used in such contracts. These solutions serve two powerful interests: first, the strong tendency of people to avoid taking responsibility for themselves, and second, the degree to which these solutions Jensen and Meckling 29 1994 increase the power and reach and, therefore, the self interest of politicians and bureaucrats. The fatal flaw in the above propositions is their assumption that when politicians intervene, they act to accomplish the desired result—that is, they act in the public interest. Those who argue for such government intervention simply assume that politicians can and will behave in accord with the desires of the electorate. The political or perfect agent model lies at the heart of virtually all campaigns that purport to solve problems by creating a governmental agency or appointing a political body. Worried about too many dangerous drugs or injuries in coal mines? Establish a Food and Drug Administration (FDA) to regulate drug testing and to grant approval for the marketing of new drugs. To reduce injuries in coal mines, pass a mine safety law with the Department of Mines to administer it. Unfortunately, the results of such programs do not lend support to the political model. After the 1962 amendments regulating the efficacy of new drugs, the number of new drug approvals in the U.S. fell by half.17 Moreover, between 1966 and 1970, more than 2,000 small nonunion coal mines closed down with no measurable reduction of injuries or death rates in coal mines.18 These results occur—and are indeed predictable—because the people who enact and administer the laws are REMMs. The bureaucrats in the FDA, for instance, face high costs if they err and allow a drug that has injurious side effects (such as Thalidomide) to be marketed. On the other hand, the people who suffer and die because FDA procedures have kept a new drug bottled up in the testing laboratories for several years (or perhaps never let it on the market) usually don’t even know that they have been harmed. Patients now able to get efficacious drug treatments in Europe that are not available in the U.S. are becoming aware of the consequences of FDA regulations, but their number is small. See Peltzman (1974, pp. 15-16), and Wardell, Hassar, Anavekar, and Lasagna (1978). Hansen (1982) reviews the literature on the effectiveness of the FDA drug regulation procedures, and Kaitin, Kenneth, Bryant, and Lasagna (1993) provide data indicating the average rate has not changed through 1990. 18 See Henderson, (1977). Jensen and Meckling 30 1994 Political action by AIDS patients and their advocates has persuaded the FDA to relax restrictions limiting access to promising AIDS treatments before they have satisfied all normal FDA regulations for public use. The mine safety law that closed down many nonunion mines was passed after active lobbying by both the United Mine Workers Union and the Bituminous Coal Operators Association (which represents the mining firms unionized by the United Mine Workers). Both of these groups faced competition from small mines that were generally staffed by nonunion labor. The costs imposed on these mines by the law were so onerous that many of them were driven out of business. Allegiance to the political model has been a major deterrent to the development of a body of theory that could explain with reasonable accuracy how the political system operates. Social scientists, especially political scientists, have been aware of the anxiety politicians exhibit to be reelected, and they have usually tacitly assumed that this induces them to behave in accord with the wishes of the majority. But this model of the legislative process is incapable of explaining what actually occurs. We know that legislators consistently vote for measures that cannot possibly be in the interest of a majority of their constituents. Except Wisconsin (and even there it is doubtful), there surely is no state in the Union where a majority benefits from government sponsorship of a cartel among milk producers. Other examples are tariffs on TV sets, oil import quotas, “voluntary” quotas on foreign automobiles, and punitive tariffs on flat panel computer screens, to name just a few. Elected officials (who are REMMs) sense that they have the opportunity to become entrepreneurs. They have access at relatively low cost to mass advertising via television, radio, newspapers, and magazines. The tenacity with which the government continues to regulate the media is not independent of their self interest in having access to shaping it and using it for publicity in a multitude of ways. Resourceful politicians also ally themselves with organized groups that get media attention and encourage the Jensen and Meckling 31 1994 organization of new groups. Indeed, now that the general nature of the process and the payoff to such organizations have been perceived, popular fronts have proliferated, each vying for publicity, even to the point of using violence to demonstrate their sincerity. Individually and collectively, legislators have an interest in enlarging the role of the state and, as REMMs, they engage in continuous marketing of programs to achieve that end. If crises do not exist, they create them, or at least the illusion of crises. Then they rescue their constituents from disaster with legislation that sacrifices the general welfare to benefit special interests. The Current Health Care Debate. For example, in recent years members of the Clinton administration and associated special interest groups have campaigned to create the public impression of a health care crisis and hence support for legislation to “reform” the U.S. health care system.19 The proposed changes would result in massive new regulation and centralization of the system. In so doing, it would transfer substantial control over an additional 14% of the U.S. gross national product to the government with obvious implications for the power base of the bureaucracy. Almost as clear, unfortunately, is the import of these changes for the efficiency and quality of U.S. health care. The proposed changes would result in a centralization and cartelization of the health care industry in the hands of government and newly proposed private bodies. This is exactly the wrong way to go with this industry. Because the specific knowledge of each case lies in the hands of the doctor and the patient, decision making in the health care industry, to be effective, must be decentralized and thus kept in their hands. The proposed centralized process for deciding on patient treatment and care will inevitably result in large declines in the quality of health care. Even ignoring the effects of the centralization, the Administration’s original plan to take $150 billion of annual costs (and, therefore, real resources) out of the system while adding as many as 37 19 See Stelzer (1994). Jensen and Meckling 32 1994 million people to it would reduce the quality and timeliness of future care and would also create shortages and lead to rationing. There is a U.S. health care problem, to be sure; but it does not stem from too little regulation and too few subsidies. Rather it comes from our third-party insurance system that effectively removes responsibility for the costs from the most important decisionmaker, that is, the patient. The key to solving this problem is to impose the financial consequences of their medical decisions on patients through greater use of co-pay insurance with larger deductibles that place first dollar costs on patients while protecting them against catastrophic illness. The Political Model in the Private Sector The political or perfect agent model is also widely used by managers of private organizations in managing their employees. Corporate managers often wish to believe that people are perfect agents with no preferences of their own. If there is a problem in part of the organization with a manager who is making the wrong decisions, the problems must come from having a “bad” person in the job. The solution is then to fire the manager and replace him or her with a new person. Tell that person (who is assumed to be a perfect agent) what you want done, and then wait for it to happen. In contrast managers using the REMM model would predict that if the manager has the proper talents and training, it is the organizational structure and incentives that are at the root of the problem. The solution would then be not to fire the manager, but to reform the organizational policies. Problems in organizations often arise because managers are rewarded for doing things that harm the organization—for example, empire building or maximizing market share at the expense of shareholder value. In compensating managers according to negotiated budgets, many companies effectively induce line managers to negotiate budget Jensen and Meckling 33 1994 targets that are well below the level that would maximize the value of the organization. The managers do this, of course, to ensure they can easily meet the target. In a related problem, large public corporations also regularly retain and tend to waste large amounts of free cash flow—that is, cash flow in excess of that required to fund all profitable projects of the firm. Spending the cash on acquisitions or other unprofitable projects (undertaken with the aid of unrealistically high forecasts of future profitability) gives management a bigger company to run, thereby increasing their power and prestige in the community. Because managerial pay tends to be positively related to the size of the company, these actions generally increase their compensation as well. In addition, keeping the cash in the firm gives them a cushion for spending during tough times, whether it is economic or not. Retaining the excess cash also makes it easier to avoid closing plants, laying off employees, cutting charitable contributions, and making the other hard choices associated with freeing up underutilized resources. Yet it is important for managers to make these difficult choices so that the resources can be put to higher-valued uses in the rest of society.20 9. In Closing We argue that the explanatory power of REMM, the resourceful, evaluative, maximizing model of human behavior, dominates that of all the other models summarized here. To be sure, each of the alternative models captures an important aspect of behavior, while failing in other respects. REMM incorporates the best of each of these models. From the economic model, REMM takes the assumptions that people are resourceful, self-interested, maximizer, but rejects the notion that they are interested in only money income or wealth. 20 See, for example, Jensen (1986, 1988, 1989a, 1989b) and Lang, Poulsen, and Stulz (1994), and Blanchard, Lopez-de-Silanes, and Shleifer (1994) and the references therein. Jensen and Meckling 34 1994 From the psychological model, REMM takes the assumption that income elasticity of demand for various goods has certain regularities the world over. Nevertheless, in taking on this modified notion of a hierarchy of needs, it does not violate the principle of substitution by assuming people have “needs.” From the sociological model, REMM takes on the assumption that “society” imposes costs on people for violating social norms, which in turn affect behavior; but it also assumes that individuals will depart from such norms if the benefits are sufficiently great. Indeed, this is how social change takes place. From the political model, REMM takes on the assumption that people have the capacity for altruism. They care about others and take their interests into account while maximizing their own welfare. REMM rejects, however, the notion that individuals are perfect agents. In using REMM, detail must be added (as we have done implicitly in the examples above) to tailor the model to serve as a decision guide in specific circumstances. We must specify more about people’s tastes and preferences that are relevant to the issue at hand—for example, by making explicit assumptions that people have a positive rate of discount for future as opposed to present goods, and that they value leisure, as well as intangibles such as honor, companionship, and self realization. Finally, combining these assumptions with knowledge of the opportunity set from which people are choosing in any situation (that is, the rates at which people can tradeoff or substitute among various goods and bads), leads to a powerfully predictive model. REMM is the basic building block that has led to the development of a more or less unified body of theory in the social sciences. For example, some economists, like recent Nobel Laureate Gary Becker, have applied REMM in fields previously reserved to sociologists such as discrimination, crime, marriage, and the family.21 Political scientists in company with economists have also employed utility-maximizing models of political 21 Becker (1968, 1973) on crime and marriage. Jensen and Meckling 35 1994 behavior to explain voter behavior and the behavior of regulators and bureaucrats.22 Still others are using REMM to explain organizational problems inside firms.23 For all its diversity, this growing body of research has one common message: Whether they are politicians, managers, academics, professionals, philanthropists, or factory workers, individuals are resourceful, evaluative maximizers. They respond creatively to the opportunities the environment presents to them, and they work to loosen constraints that prevent them from doing what they wish to do. They care about not only money, but almost everything—respect, honor, power, love, and the welfare of others. The challenge for our society, and for all organizations in it, is to establish rules of the game and educational procedures that tap and direct the creative energy of REMMs in ways that increase the effective use of our scarce resources. REMMs are everywhere. 22 See Downs (1957) and Buchanan and Tullock (1965) on political choice; Niskanan (1971) on bureaucracies. 23 Alchian and Demsetz (1972), Arrow (1971), Jensen and Meckling (1976, 1992), and Williamson (1970, 1975), Milgrom and Roberts (1992). Jensen and Meckling 36 1994 References Alchian, Armen A. and Harold Demsetz (1972). “Production, Information Costs, and Economic Organization.” American Economic Review LXII, no. 5 (December): 777-795. Argyris, Chris (1990). Overcoming Organizational Defenses. New York, Allyn and Bacon. Argyris, Chris (1991). “Teaching Smart People How to Learn.” Harvard Business Review (May-June): 99- 109. Argyris, Chris (1993). Knowledge for Action: A Guide to Overcoming Barriers to Organizational Change. San Fransicso, CA, Jossey-Bass, Inc. Arrow, Kenneth J. (1971). Control in Large Organizations: Essays in the Theory of Risk-Bearing, Markham Publishing Co. Baker, George P., Michael C. Jensen and Kevin J. Murphy (1988). “Compensation and Incentives: Practice vs. Theory.” Journal of Finance 43, no. 3 (July): 593-616. Becker, Gary S. (1968). “Crime and Punishment: An Economic Approach.” Journal of Political Economy 76 (March/April). Becker, Gary S. (1973). “A Theory of Marriage: Part I.” Journal of Political Economy 82 (July/August). Blanchard, Oliver, Lopez-de-Silanes and Andre Schleifer (1994). “What Do Firms Do with Cash Windfalls.” Journal of Financial Economics . Boulding, Kenneth E. (1962). Conflict and Defense. New York, Harper & Row. Buchanan, James M. and Gordon Tullock (1965). The Calculus of Consent, Logical Foundations of Constitutional Democracy. Ann Arbor, Michigan, University of Michigan Press. Downs, Anthony (1957). An Economic Theory of Democracy. New York, Harper & Row. Hansen, Ronald W. (1982). “The Relationship between Regulation and R&D in the Pharmaceutical Industry: A Review of Literature and Public Policy Proposals”. The Effectiveness of Medicines in Containing Health Care Costs: Impact of Innovation, Regulation, and Quality, National Pharmaceutical Council. Hayek, F.A. (1945). “The Use of Scientific Knowledge in Society.” American Economic Review 35, no. 4 (September). Hayek, Freidrich A. (1977). “Planning our Way to Serfdom.” Reason (March). Henderson, David R. (1977). Coal Mine Safety Legislation: Safety or Monopoly? Rochester, NY, University of Rochester. Initiative Committee for National Economic Planning (1975). The Case for Government Planning. New York Times. Jensen, Michael C. (1986). “Agency Costs of Free Cash Flow: Corporate Finance and Takeovers.” American Economic Review 76 (May): 323-329. Jensen and Meckling 37 1994 Jensen, Michael C. (1988). “Takeovers: Their Causes and Consequences.” Journal of Economic Perspectives 2 : 21-48. Jensen, Michael C. (1989a). “Active Investors, LBOs, and the Privitization of Bankruptcy.” Journal of Applied Corporate Finance 2, no. 1 (Spring): 35-44. Jensen, Michael C. (1989b). “Eclipse of the Public Corporation.” Harvard Business Review 67, no. 5 (September-October): 61-74. Jensen, Michael C. (1993). “The Modern Industrial Revolution, Exit and the Failure of Internal Control Systems.” Journal of Finance (July): 831-880. Jensen, Michael C. (1995). “Economics, Organizations, and Non-Rational Behavior.” Economic Inquiry . Jensen, Michael C. and William H. Meckling (1976). “Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure.” Journal of Financial Economics 3, no. 4 (October): 305-360. Jensen, Michael C. and William H. Meckling (1992). “Specific and General Knowledge, and Organization Structure”. Contract Economics. L. W. a. H. Wijkander. Oxford, Basil Blackwell: 251-274. Jensen, M. C. and Kevin J. Murphy (1990). “Performance Pay and Top Management Incentives.” Journal of Political Economy (April). Kaitin, Kenneth I., Natalie R. Bryant and Lewis Lasagna (1993). “The Role of Research-Based Pharmaceutical Industry in Medical Progress in the United States.” Journal of Clinical Pharmacology 33 (May): 412-417. Lang, Larry, Annette Poulsen and Rene M. Stulz (1994). “Asset Sales, Firm Performance, and the Agency Costs of Managerial Discretion.” Journal of Financial Economics . Larrick, Richard P., Richard E. Nisbett and James N. Morgan (1993). “Who Uses the Cost-Benefit Rules of Choice? Implications for the Normative Status of Microeconomic Theory.” Organizational Behavior and Human Decision Processes 56 (3): 331. Maslow, A.H. (1943). “A Theory of Human Motivation.” Psychological Review 50 (January): 370-396. Meckling, William H. (1976). “Values and the Choice of the Model of the Individual in the Social Sciences.” Schweizerische Zeitschrift fur Volkswirtschaft (December). Milgrom, Paul and John Roberts (1992). Economics, Organization, and Management. Englewood Cliffs, NJ, Prentice-Hall. Niskanan, William A., Jr. (1971). Bureaucracy and Representive Government. Aldine-Atherton, Inc. Peck, M. Scott (1978). The Road Less Traveled. New York, Simon & Schuster. Peltzman, Sam (1974). Regulation of Pharmaceutical Innovation, American Enterprise Institute. Popper, Karl (1950). The Open Society and its Enemies. (Second Edition), Princeton NJ, Princeton University Press. Schwert, G.W. (1993). Mark-up Pricing in Mergers and Acquisitions. Rochester, NY, University of Rochester. Jensen and Meckling 38 1994 Simon, Herbert A. (1955). “A Behavioral Model of Rational Choice.” Quarterly Journal of Economics 69 : 99-118. Stelzer, Irwin M. (1994). Pricing Health Care: There is No Health Care Crisis. Wall Street Journal. Sykes, Charles J. (1992). A Nation of Victims: The Decay of the American Character, St. Martin’s Press. Wardell, William M. , Mohammed Hassar, Sadanand N. Anavekar, et al. (1978). “The Rate of Development in New Drugs in the United States, 1963 through 1975.” Clinical Psychology and Therapeutics 24, no. 2 (August). Williamson, Oliver E. (1970). Corporate Control and Business Behavior. Englewood Cliffs, NJ, Prentice- Hall. Williamson, Oliver E. (1975). Markets and Hierarchies: Analysis and Antitrust Implications. New York, Free Press.

I had dinner with my friend Brad last night and he asked if I had a Blog for The Life Cube project, and then he asked are you posting daily?  Obviously, I have a Blog, but as any reader knows, I have failed miserably at updating it and posting.  I do want to share — and it has been a roller coaster of ups and downs and challenges and wins since January.  Here’s were we are as of today: We did not get funded by Burning Man to bring our art to the playa. We did not get free tickets this year.  Securing tickets to purchase was a challenge, but with the help of Maria, the Art Advocate, we did manage to make sure we had tickets for our team. We thought about down-sizing the project from what I envisioned, but decided to stick with the plan.  The Life Cube V2 will be 8 times as big as last year. Madeleine has been so supportive of my “crazy project” I can not begin to share how I feel.  She is amazing! We have obtained permission to burn TLC V2 at midnight right after the Man burns.  This is a terrific slot.  Several fire dancers and entertainment folks are planning on doing a pre-burn show. Getting approval for the burn required a very comprehensive and detailed plan to Dave X and his team.  This was not an easy approval to get! Many many people have donated materials, work space, time, labor, tools. Gordy has been the power driving the pre-playa construction (and Gordy will tell you he is not sure why he is doing all this work). Mark is a master carpenter that came out of the woodwork and is not only helping to build in S. lake Tahoe, but has agreed to come to Burning Man with us this year. Julio in North Dakota has pulled together some terrific designs incorporating various quotes I selected this year.  To say it exceeds expectations is an understatement.  I am tempted to post the pics of his drawings, but have decided to keep it a secret and wait to unveil on the playa.  Pics will be posted post BM for those not going. Trevor is bringing a huge light show to the playa that should result in TLC being a beacon on the playa at night. Dominique is checking on availability of some fantastic bells made out of old oxygen tanks.  If these are available, we will have solved what to do with sound this year. I spoke with several printing companies.  There was a large difference in price and it was a lot of negotiations and re-figuring.  We are going to use vinyl for the sides and carpet for the top.  Did I mention the design is very very cool? We did get The Life Cube V2 art project at Burning Man up on kickstarter over the July 4 holiday weekend. Printer in Ohio will have the files before Monday AM. Printing will happen Aug 30-Aug 10 Shipping of vinyl and carpet on or before Aug 10 Delivery of printed stuff by Aug 17 The printing should arrive in S. Lake Tahoe no later than Aug 17. I head to Reno on Aug 19, and have plans to help with the pre-playa construction and provision. On Aug 23, I will be on the playa — with 3 266 foot trucks moving over 10 tons of wood! On Aug 24, with all the luck in the world, we will have a crew on the playa to help with the build on Aug 24. So there you have it.  There are lots of back stories and tales, but I have to get back to making this all happen.  If you have not viewed the project on kickstarter – http://www.kickstarter.com/projects/thelifecube/the-life-cube-v2-at-burning-man?ref=live you can also see the video on you tube at Thanks again to all for your support. skeeter #playa #TheLifeCube #Cubelifecubelifecubeprojectlifecubelifecubeproject #Burningman #bm2012 #skeeter #artburningman #TheLifeCubeV2 #BurningMan

Photograph by Nikiya Berry “Our Las Vegas” is delighted to be working this year with students in Professor Mary Hausch‘s Advanced Reporting Class in the UNLV Hank Greenspun School of Journalism & Media Studies. During the year, we’re collaborating on a number of projects – including the Daily Frame to which Ms. Berry is making her second contribution. She writes: “The art on the cube is constantly changing. Anyone is welcome to draw or paint on the cube. Everyone is encouraged to write down their goals and wishes and put it inside the cube. The cube will burn on March 21 and everyone’s wishes will burn into the universe. The more you write down your wishes and set your goals, the more likely you can manifest your destiny.” She adds: “I felt the positive energy while at The Life Cube and will definitely be back again. I am trying to spread the message to my friends to come, write down their wishes and support the project before the burn.” * Las Vegas born and raised Nikiya Berry is in her second semester at UNLV. Prior to enrolling, she attended the College of Southern Nevada. She plans to pursue a career in broadcast journalism. She notes: “I can edit, shoot, report and write and like all of it. I am adventurous and inquisitive which gives me opportunities to meet new people and learn new things.” • • • Made possible with the generous support of the City of Las Vegas Arts Commission, “The Daily Frame,”, a project of “Our Las Vegas,” showcases a wide range of photographs that celebrate the City’s unique culture, cityscape and residents. Photographers | artists | creatives interested in participating are enthusiastically encouraged to contact us at ourlasvegas at gmail dot com. #art #nikiyaberry #journalism #LasVegas #daily #lifecubeproject #frame #unlv #lifecube #scottcohen #downtown

Jov did a spectacular job of creating this short film on Burning Man 2012.  He is a rock star talent with a beautiful eye.  Thanks to all for such a terrific time. #TheLifeCube #titicaca #bm2012 #skeeter #artburningman #TheLifeCube #TheLifeCubeV2 #BurningMan

My good friend Scott E should find this one interesting. He spotted this trend a log time ago, and is working on creating a digital studio by assembling an A Team of talented producers and old TV execs. By LORNE MANLY Published: February 4, 2007 For the past 26 years, Jim Schumacker has toiled for the marketing machine that is the Anheuser-Busch Companies, doing his part to stoke Americans’ cravings for a cool Bud, or a Michelob, or a Bud Light. Eight of those years were spent overseeing the beer maker’s creation of 30-second commercials, those gently mocking vignettes whose characters and catch-phrases often burrowed their ways into the nation’s consciousness. Mark Peterson/Redux, for The New York Times Future Spot Kevin Farley on the set of "Futureman," one of a group of new Web-only comedy series appearing on Bud.TV. Multimedia Product Displacement Filming ‘‘Finish Our Film.’’ Like all series on Bud.TV, ‘‘Finish Our Film’’ tries to bring cool to Anheuser-Busch without ever (or rarely) mentioning beer. The Viral Corporation Bud.TV shows like "Futureman" are purpose-built to be passed around the Web like any YouTube video, albeit bearing a Bud.TV logo. But lately, the man everyone calls Schu has been working on a different sort of content, programming for a new online entertainment network called Bud.TV. The network, which will make its debut on Monday at www.bud.tv, is the most ambitious and costly effort to date of a marketer creating Web content tailored to its own specifications. And Schumacker, a 54-year-old avuncular sort partial to earth-tone suede sandals and with a soul patch that sets off his thatch of wavy salt-and-pepper hair, is the project’s creative shepherd. One of the first shows that will appear on Bud.TV is called “Finish Our Film,” a mash-up of reality show and making-of-a-film documentary that will be produced by LivePlanet, Matt Damon and Ben Affleck’s production company, best known for “Project Greenlight.” LivePlanet will shoot the first and last minutes of a short film and ask hopeful auteurs to plot out the middle. The person with the best treatment will be invited to Los Angeles, and every last moment of the moviemaking process (or ordeal) will be captured on digital tape. The concept as concocted by the writers, who have done their time at the likes of “The Howard Stern Show,” “The Man Show” and “Da Ali G Show,” would at first glance be perfectly suited for a beer commercial. The film opens in a strip club during a raucous bachelor party, where a groom-to-be named Steve suffers through a lap dance. But the party-hearty tone swiftly changes when the flirtatious dancer turns deadly serious, urgently warning her abashed customer that if he desires to live past the night, he’d better grab the note nestled in her cleavage. Steve does as he’s told, and when the film resumes, he is seen beaten, blindfolded and bound to a chair, a firing squad taking aim. Strippers notwithstanding, much of the pitch for “Finish Our Film” subverts the expectations of a beer company — it’s closer to the mind games of the David Fincher movie “The Game” than the bacchanal of “Bachelor Party.” And Schumacker, whose official title is vice president of digital marketing and branded entertainment, and other executives at Anheuser-Busch want the rest of Bud.TV to do the same. Yes, the site will carry the high-concept comedy of “Replaced by a Chimp,” in which a great ape tries to do the job of its evolutionary betters, including dentist, car mechanic and ad executive. But Bud.TV is striving to be more than a repository for Budweiser ads and lighthearted, slightly mocking beer-commercial humor; Schumacker and his team are aiming to redefine what an online entertainment network and marketer-created content can mean in a short-attention-span world. Performers and writers from “Saturday Night Live” have signed on to create and star in recurring series. Kevin Spacey’s production company, Trigger Street Films, has agreed to supply short movies. Satirical shows about celebrity entitlement and the news are on the schedule. The sports announcer Joe Buck may do a talk show from the back of a New York cab. And Schumacker has acquired a slickly produced science-fiction series, made in conjunction with the leading video-game maker Electronic Arts. Most of the shows will run from one to eight minutes, but some will be as long as a half-hour. Bud.TV may be a marketing venture at heart, but it is marketing sotto voce. The shows’ plots won’t revolve around the quest for the perfect beer and a beautiful woman to share it with. Characters won’t declaim the virtues of Budweiser’s freshness at every opportunity. The site won’t be cluttered with banner ads. Anheuser-Busch executives are banking on a more subtle connection. Attach a brand name to something cool, something entertaining, and that elusive young man (and to a lesser extent, young woman) may check out Bud.TV’s offerings again and again, send them along to friends, even take a stab at creating his own minifilm for the site. Cultivate that warm, fuzzy feeling about Budweiser, and the company may cement the loyalty of the existing customer, or better, woo the uncommitted or hard-to-reach drinker to a Bud Light or a Michelob or a Peels malt-liquor beverage. Bud.TV represents Anheuser-Busch’s search for a toehold in a world where the traditional advertising model revolving around 30-second ads has been sideswiped by technological change and the proliferation of entertainment choices. The company, like almost every big marketer, is also trying to seize on the video-sharing democratization of YouTube, albeit on its own controlling terms. It’s an expensive undertaking — it’s expected to cost more than $30 million in its first year — and one that could be mistaken for creative hubris. Anheuser-Busch has created some of the more memorable 30-second ads, like the wisecracking lizards Frank and Louie, the “I Love You, Man” Man, the “Whassup?” guys and Ted Ferguson, the Bud Light daredevil who attempts feats of amazing inconsequentiality. But full-fledged original programming is something else entirely. Ultimately, Anheuser-Busch executives told me, they believe they have no choice but to take this leap of faith. “If we don’t start playing in this digital game now,” said Tony Ponturo, Anheuser-Busch’s vice president of global media and sports marketing and Schumacker’s boss, “we’re going to be playing catch-up for a long time. And this is an industry that can’t afford catch-up.” On the Tuesday before Christmas, Anheuser-Busch’s digital adventure took Schumacker and his colleagues to the Venice Center for Peace With Justice and the Arts, a squat, faded yellow building bordering a skateboard park a few miles from the Pacific Ocean. During the day, the community center holds programs for special-needs kids. It also contains, on the second floor, the achingly hip office of Matt Piedmont. Piedmont has never worked for an advertiser before. A former writer for “Saturday Night Live” and a consulting producer for David Spade’s “Showbiz Show” on Comedy Central, he spends most of his days creating TV pilots and movie projects, like the film with Spade and Ice Cube, tentatively titled “Someone Stole My Weed.” But Anheuser-Busch has brought him aboard to serve as executive producer over what will be one of Bud.TV’s signature shows, “Happy Hour.” Each weekday, at 4:55, “Happy Hour” will feature a new one- to four-minute episode of a rotating group of comic series. That week in December, Piedmont wrote eight episodes for most of the series, with help from Matt Murray, a current “Saturday Night Live” writer who gave up a chunk of his holiday hiatus to work on “Happy Hour.” Describing the tone and image he was shooting for in these shows, Piedmont tossed out admiring references to the Coen brothers’ “Big Lebowski” and the absurdist oeuvre of Wes Anderson (“Rushmore” and “The Royal Tenenbaums”). He plans for the silly/smart mix to have plenty of deadpan and observational humor, and he hopes to inject a visual sense a cut above typical Web programming, thanks to the use of two high-definition cameras (one a Steadicam) and high-end post-production. But these shows are still being done quick and on the cheap; the budget for all six of the “Happy Hour” shows comes in well under $1 million. As “The Beat Goes On” by the Young-Holt Unlimited played on the turntable, Piedmont ran through the concepts. “Ice Vision and Chef” follows in mockumentary style the comeback attempt of a defrocked superhero, Ice Vision, whose special powers went to his head and got him booted out of the Elite League. In “Futureman,” a technician at the Institute for Science and Research Institutional Institute makes contact with a man from the future who’d like to benefit today’s world with his knowledge, only to display an appalling ignorance of anything important. Piedmont’s comedy connections have paid off in casting. During his six years on “Saturday Night Live,” he wrote often for and with Tim Meadows, and the actor has agreed to play Ice Vision. “I can relate to the character,” Meadows said with a laugh when he dropped by the office for a meeting later that day. “He once had it all and lost it.” Chris Parnell and Kevin Farley, brother of the late Chris Farley, have filmed their “Futureman” episodes. Comic short-form videos are a staple of the Web these days, particularly at sites like Heavy.com, which cater to young men, and the rest of Bud.TV’s lineup will be filled with such offerings, some with the requisite audience participation. “Blow Stuff Up” (although the actual title uses a more profane noun) allows the public to submit videos showing the objects they detest most and why they’d like to see those objects destroyed. And just as John Candy and Joe Flaherty did on SCTV’s “Farm Film Report,” the show’s professional pyrotechnicians will blow up those hated possessions “real good.” Bud.TV’s parody of reality competition shows, “Fool’s Gold,” follows 12 contestants on a search for buried treasure in Death Valley, Calif. They’ll quickly find millions of dollars in gold nuggets, but the bonanza comes with a catch: they can keep only what they can carry out of the desert, and they have to survive the physical and mental challenges set to them by a crusty old miner named Pick Ax Pete. “Every day is a wacky death march,” said Alex Keledjian of Omelet, the Los-Angeles-based agency that came up with the idea. But Schumacker insists that he doesn’t want Bud.TV to be pigeonholed, and if one program demonstrates his ambitions for Bud.TV, it’s the science-fiction series “Afterworld.” The series tracks an advertising executive on a business trip who wakes up in a country where hundreds of millions of people have suddenly gone missing; he then tries to make his way home to see if his wife and child are still alive. The mix of live action and animation (from Electronic Arts) runs 130 episodes; a new one will be doled out each weekday. “People aren’t expecting that from Bud.TV,” Schumacker said. “Which I think also is a benefit for us, long-term, to balance out that whole ‘Oh, those guys are going to give us the comedy act’ to ‘Wow, they’re going to have a broad range of programming.’ ” The idea for Bud.TV came to Schumacker about two years ago, when he confronted at least 300 commissioned scripts for commercials piled on his office conference table. “This is insane what we’re doing,” he told his colleagues. Only a handful would make it on to television. And some of these scripts, he saw, could be better if the characters were developed and the story lines were extended, perhaps on the Web, which a younger generation was increasingly turning to not only for information or blabbing with friends but also as an entertainment option. “And I said, ‘Let’s start Bud.TV,’ ” he recalled. “We all laughed about it. And then I got up and went and got a soda, and when I came back I said, ‘I’m serious.’ ” His colleagues were skeptical. “They’re like, ‘Good luck selling that,’ ” he said. But Schumacker, who at the time was the head of creative development for the company, was not the only executive there thinking along those lines. Tim Murphy, the senior director of digital marketing, was hatching his own idea for an online network. And persuading their bosses was surprisingly easy. What drove Anheuser-Busch to build a site that will dwarf every corporate foray into digital entertainment that has come before was a combination of changing drinking and media habits. Not only is beer losing ground to wine and liquor, Anheuser-Busch’s market share has slipped, and its flagship brand, Budweiser, saw its dollar sales tumble 7.5 percent in the 52 weeks ending Dec. 3, 2006, according to Information Resources Inc., which tracks supermarkets, drugstores and mass merchandise outlets (excluding Wal-Mart.) No turnaround will be possible without capturing the impressionable taste buds of people entering their prime drinking years. But that potential Bud lover is a particularly devilish person to reach and a difficult one to talk to, particularly these days, and particularly through traditional 30-second commercials. The TiVo generation revels in its newfound power to control the television-viewing experience, dictating the terms of how and when to watch their favorites in ways unfathomable only a decade ago. And increasingly, that means skipping right past the ads that marketers spend billions on every year to produce and put on the air. Anheuser-Busch’s 30-second spots still work better than many, largely because of their crowd-pleasing humor. (Last year, in the three days after the Super Bowl, the beer maker’s ads were viewed more than 21 million times on the Web.) But no advertiser is immune to the shifting media landscape, and connecting with tomorrow’s beer drinker will become only tougher in the years ahead. Already Anheuser-Busch has slashed the percentage of its advertising budget devoted to network television, from 53.5 percent ($292.8 million of the total $547.1 million) in 2004 to 47.3 percent ($287.2 of $606.7 million) in 2005, according to TNS Media Intelligence, which tracks advertising spending. The company told investors in November that 2007 will see network television play an even smaller part in the beer maker’s marketing. But shoving those ads to the Web, where the multitasking, short-attention-span crowd spends hours and hours, won’t suffice. Even though Anheuser-Busch has no track record in the dicey world of content creation, TV networks in the past expressed interest in making some of the company’s most popular characters — Leon, the me-first athlete; the “I Love You, Man” Man, who would do and promise anything for a Bud Light; the talking lizards — into sitcom stars. And while none of those flirtations with prime time led to anything, “All those things start to click in your head,” Ponturo, Schumacker’s boss, told me. “I guess we’re sort of hoping that we catch a little bit of that magic with the stuff we’re doing on Bud.TV.” Anheuser-Busch’s desire to call the creative shots evokes the early days of television and radio. Marketers did not pay merely to have their products plugged relentlessly on the likes of “The George Burns and Gracie Allen Show,” during which Gracie would extol Carnation condensed milk while pouring herself a cup of coffee. They often owned the shows themselves and directed their ad agencies to produce them. Colgate had its “Comedy Hour” and Texaco its “Star Theater” (and a cross-dressing Milton Berle). But a burgeoning star structure and a unionizing industry jacked up production costs, and companies began souring on the joys of ownership. The quiz-show scandals of the late 1950s extinguished any lingering infatuation, with the exception of soap operas and a straggler or two. It was more economical for advertisers to buy time for their messages, and it proved to be a great business for the networks too. But those once-clear-cut divisions between network and marketer, between creator and financial backer, have begun to blur. As digital video recorders become a staple of the home-entertainment center, advertisers are embracing product placement to a degree they never did before, working their products into reality shows and, more recently, into the scripts of dramas and comedies. Every self-respecting advertising agency has started a division devoted to what is euphemistically called “brand integration,” the better to display their clients’ wares and buff their images in projects they can exert more control over or own outright. And studios, like the television group at Warner Brothers, have begun divisions to develop Web, wireless and other programming with advertisers. Office Max created a reality show about preteens preparing for high school that was shown on ABC Family. Unilever turned its Axe body spray into a special for MTV called “Game Killers.” PepsiCo financed “First Descent,” a documentary about snowboarders (produced by LivePlanet), convinced that Mountain Dew embodies the live-life-to-the-fullest ethos of the featured snowboarders. And the Crispin, Porter & Bogusky ad agency is shopping a movie treatment based on the big-headed King mascot it created for Burger King, the one that pops up in the most unsettling places (like someone’s bed) to serve a piping-hot sandwich. Anheuser-Busch has plastered its products into shows like “Entourage” and developed elaborate marketing tie-ins with movies like “Wedding Crashers.” Like most marketers, however, it has so far refrained from jumping into the television- or movie-production business (except for its sports-production unit, which televises events like St. Louis Cardinals baseball games), dissuaded by the cost and the craziness of Hollywood. Web content, however, is not as expensive to assemble as television shows or movies, making it an attractive place to experiment. And viewers’ acceptance of the rawness of Web video, in contrast to expectations of perfectly executed television programming, gives Bud.TV executives room to tinker that network executives don’t enjoy. The promise of control, a concept woven into the company’s culture, was also deeply appealing and is something Anheuser-Busch would not have if it followed the more traditional route of running its online programs on third-party Web sites or working its products into someone else’s creation. “It’s their own sandbox,” says Joseph Jaffe, the author of “Life After the 30-Second Spot.” “And because it’s their own sandbox, they can make their own rules.” In an Anheuser-Busch conference room in St. Louis at the end of last November, Ponturo placed a DVD into the player, and the first episode of “Truly Famous” began to unfold. The show, a satirical look at celebrity culture, tags along reality-style with its faux Spanish star, dubbed Crisanto, who comes complete with agent, publicist, personal assistant and bodyguard. The entourage sweeps into Los Angeles establishments catering to the rich and pampered and proceeds to see how much swag and sycophantic behavior they can attract. Hilarity, and crowds, ensue. “We actually had real paparazzi chasing the fake paparazzi,” said Todd Brandes, a DDB Chicago executive who has worked with Anheuser-Busch for nearly a decade. In this episode, Crisanto and company arrive at a hair salon on Rodeo Drive in Beverly Hills. The staff scurries to pay homage to the celebrity among them, even though they’re clueless about who he is. Crisanto receives not only a free haircut (worth hundreds of dollars), but his posse gets lunch ($28 tuna-fish sandwiches) and wine on the house. “Would it be too crass to have them ask for Bud or Bud Light?” Ponturo asked. Schumacker pondered the question. “In Beverly Hills, that probably wouldn’t work.” He added, “We have to be careful we’re not promoting other alcoholic drinks.” Perhaps a request for Peels, the fruit-flavored malt beverage aimed at a more upscale audience, would make creative sense. “Is that going to hurt us?” asked David Rolfe, the lead DDB Chicago executive on the Bud.TV account, before answering the question himself. “As long as the entertainment value is there, customers won’t mind.” The philosophical argument continued, as the same team members often took both sides of the debate as they struggled to make policy. “We want to make sure we’re not forcing the product,” Schumacker said. “But the same time not be scared to promote it,” Rolfe added. Ponturo then issued his edict. “Shoot the blatant but well-done product shot,” he said. “But if it doesn’t work, leave it on the cutting-room floor.” Both Ponturo and Schumacker understand that pounding Anheuser-Busch products into programming could make Bud.TV seem like nothing more than a propaganda machine. Traditional media is the place for obvious commercialization. “On the entertainment side, you’re better to err on the side of subtlety,” Ponturo said. As it turns out, the first four episodes of “Truly Famous” will carry no product placement. A similar restrained philosophy also holds for the style of humor — there may be bleeped-out cursing, but no insulting, gratuitous or “Jackass”-style humor will be tolerated. “We want to be edgy, we want to be fun and interesting, but I really want some class to it,” Ponturo said. “At the end of the day,” he added, “we’re a public company whose ultimate mission is to sell a whole lot of beer. So we don’t want to put ourselves at risk for the wrong reasons.” Anheuser-Busch’s very entry into online entertainment, however, invites confrontations, and some obvious adversaries have already made their displeasure known. In October, 60 health, safety and child-protection organizations urged the celebrities associated with Bud.TV — Affleck, Damon, Spacey, Vince Vaughn, whose “Wild West Comedy Tour” will be featured — to insist that Anheuser-Busch install stringent age-verification measures. But that demand seemed almost beside the point, as it was coupled with a plea for the stars to reconsider their participation altogether. Any utopian dreams for an Internet free of commercialization may have been dashed years ago, but efforts by beer, wine and liquor companies still touch a raw nerve. “It’s not as if Colgate-Palmolive is undertaking the initiative,” says David Jernigan, the executive director of the Center on Alcohol Marketing and Youth at Georgetown University. “We’re not talking dish soap. We’re talking about the No. 1 drug problem of kids.” The Internet, with no government oversight and leaky parental controls, only compounds the problems. Self-imposed age-verification measures are almost laughable in their naïveté. Most ask visitors if they are of age, or ratcheting up the level of difficulty, request people to punch in their dates of birth to ensure they meet the qualifications. All that’s needed to get around that more advanced system are some basic math skills and a desire to sneak past the virtual bouncer. Anheuser-Busch, to its credit, will have one of the smarter gatekeepers keeping watch over Bud.TV. It has bought an identity-verification system used by casinos and banks, Aristotle’s Integrity, which checks the names and Zip codes against driver’s licenses and other public records. Yet once vetted, there’s nothing to stop Bud.TV viewers from sharing the goodies with under-age friends, relatives or complete strangers on YouTube. Anheuser-Busch executives understand this viral loophole. With its inherent pass-it-on nature, Web video demands to be shared. Not only does it provide street cred; it’s also an inexpensive way to get the word out. And the Bud.TV logo will be emblazoned on every shared video. But the YouTube model has it limits as far as Bud.TV executives are concerned. When it comes to the buzz phrase of the media moment — “user-generated content” — they think they have crafted a strategy to rein in some of the overexuberance that has frustrated and even embarrassed several advertisers. Last spring, Chevrolet invited people to create their own video spots for its Tahoe sport-utility vehicle. Thirty thousand people submitted entries during the four-week contest, but the few ads that subverted Chevrolet’s intention by linking the Tahoe to global warming and sexual inadequacy garnered the bulk of the headlines. Marketing experts argue that it’s a small price to pay for connecting with today’s more skeptical, harder-to-reach consumers, and they urge companies to relinquish control and learn to love it. Anheuser-Busch executives do not agree. “I think YouTube does what it does just fine,” Schumacker said, adding, “I don’t want to be YouTube.” So Anheuser-Busch will lend a guiding hand, offering freedom with a catch. For its “Real Men of Genius” contest, which it is working on with JibJab, an online video site lauded for its singing wrap-ups of the year in politics, Bud.TV will provide plenty of components for people to build their ads around, including audio tracks and filmed openings and endings. The ads, parodies of 1980s advertising and power ballads (à la Night Ranger’s “Sister Christian”), mock-salute the shlubs of America, like Mr. Underwear Inspector No. 12 and Mr. Really Bad Toupee Wearer. The creator of the best ad will get to make an actual Bud Light commercial. “If 2006 was the year of user-generated content, in 2007 you’ll see elevated production levels,” said Gregg Spiridellis, co-founder of JibJab. “We call it the coloring book versus the canvas.” Bud.TV still represents just a tiny fraction of Anheuser-Busch’s billion-dollar-plus annual marketing budget, more than $600 million of which will be spent on traditional advertising in 2007, but it’s likely to cost a lot more than anticipated, and its benefits will be difficult to assess. Officially, Anheuser-Busch has budgeted more than $30 million for the start-up costs and the first year of operations of the site, but Ponturo told me that figure is likely to pass $40 million by the time 2007 comes to a close. The Web site’s technological demands have proved costlier than planned, and Bud.TV’s voracious appetite for new content — at least 15 new segments will be posted each week — has eaten through expectations and forced Schumacker and his team to decide as they go just how much they are willing to spend on programming. The development and production tally for the first three shows Bud.TV commissioned (“Truly Famous,” “Replaced by a Chimp” and a makeover show for clueless Casanovas called “What Girls Want”) came in around $2 million, averaging between $20,000 and $25,000 a minute. At that rate, Ponturo told me, the annual budget would be sapped in a matter of months. “You can let the ball of yarn get away from you very fast,” Ponturo said. The later shows, he added, are costing a more affordable $6,000 a minute. Beyond keeping a lid on programming costs, Bud.TV executives will also deal with some of the pit-of-the-stomach dread that comes with the job description of any network executive: the tyranny of ratings. If after a year, between two million and three million people between the ages of 21 and 34 are visiting each month, “It would put us in high cotton,” Ponturo said. (An audience of that size would tower over what sites like Heavy.com and Break.com see.) But if that traffic figure is stalled in the mid-six-figures, “then I would think that we’ve missed the mark,” he said. A middling performance, however, and the question of failure or success becomes a tougher call. Some positive publicity and a smattering of blog buzz may be all that’s needed to keep Anheuser-Busch pouring tens of millions of dollars a year into Bud.TV. Because ultimately, proving that an online entertainment network helps the company sell more beer falls into the realm of the subjective. “It’s tough to build a business plan,” Ponturo said with exquisite understatement. “Marketers don’t always have to prove two plus two equals four. You have to go sometimes with your instincts and your gut judgment and your years of experience.” And there’s even the hope that Bud.TV could create revenue streams of its own. Ponturo, Schumacker and their colleagues talk about Bud.TV serving as an incubator for television, DVD or perhaps film. While much won’t translate, “Afterworld” and some of the “Happy Hour” shows just might make the jump. And if the shows end up having a life outside of Bud.TV, whether on Comedy Central, Spike TV or as DVD originals, Anheuser-Busch, playing the role of producer, will get a cut of the back end. In this topsy-turvy world of media and entertainment, where marketers play programmer, studios play ad agency and viewers play possum when traditional ads come on television, one other twist is in the offing. If Bud.TV becomes a virtual hangout for young men, Anheuser-Busch may well start selling advertising to other companies who crave pushing their marketing messages in front of this fickle audience. That debate is already taking place within Anheuser-Busch. At first, Schumacker itched to market Bud.TV. But on further reflection, he realized that that would negate the streamlined, almost minimalist design of the site. After all, Schumacker told me, he didn’t want Bud.TV to look like it was selling out. Lorne Manly is the chief media writer for The New York Times. This is his first article for the magazine.