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Monthly Archives: November 2012

I SPENT five unexpected hours in an airport this Thanksgiving holiday when our plane had mechanical difficulties and we had to wait for another plane to arrive. So I had plenty of time to think about the subject of boredom.

I won’t lie to you. Half a day in an airport waiting for a flight is pretty tedious, even with the distractions of books, magazines and iPhones (not to mention duty-free shopping).

But increasingly, some academics and child development experts are coming out in praise of boredom.

It’s all right for us — and our children — to be bored on occasion, they say. It forces the brain to go on interesting tangents, perhaps fostering creativity. And because most of us are almost consistently plugged into one screen or another these days, we don’t experience the benefits of boredom.

So should we embrace boredom?

Yes. And no. But I’ll get back to that.

First of all, like many people, I assumed that boredom was a relatively recent phenomenon, with the advent of more leisure time. Not so, says Peter Toohey, a professor of Greek and Roman history at the University of Calgary in Canada and the author of “Boredom: A Lively History” (Yale University Press, 2011).

“Boredom actually has a very long history,” he said. “There’s Latin graffiti about boredom on the walls of Pompeii dating from the first century.”

Then there’s the question of how we define boredom. The trouble is that it has been defined, and discussed, in many different ways, said John D. Eastwood, an associate professor of psychology at York University in Ontario, Canada.

After looking over the research literature and putting the idea in front of a focus group of about 100 people, Professor Eastwood and his colleagues defined boredom as an experience of “wanting to, but being unable to engage in satisfying activity.”

What separates boredom from apathy, he said, is that the person is not engaged but wants to be. With apathy, he said, there is no urge to do something.

The core experience of boredom, he said, is “disruption of the attention process, associated with a low mood and a sense that time is passing slowly.”

Boredom can sound an awful lot like depression. But Professor Eastwood said that while they can be related, people who are bored tend to see the problem as the environment or the world, while people who are depressed see the problem as themselves.

Sometimes we think we’re bored when we just have difficulty concentrating. In their study, “The Unengaged Mind: Defining Boredom in Terms of Attention,” which appeared in the journal Perspectives on Psychological Science in September, Professor Eastwood and his colleagues pointed to an earlier experiment in which participants listened to a tape of a person reading a magazine article.

Some groups heard a loud and unrelated television program in the next room, others heard it at a low level so it was barely noticeable, while the third group didn’t hear the soundtrack at all.

The ones who heard the low-level TV reported more boredom than the other two groups — they had difficulty concentrating but were not sure why, and attributed that difficulty to boredom.

When you’re trying to focus on a difficult or engaging task, disruption of attention can lead to boredom, said Mark J. Fenske, an associate professor of neuroscience at the University of Guelph in Ontario and one of the authors of the study.

On the other hand, when you’re doing something dull, “such as looking for bad widgets on a factory line, distracting music can help you not be bored.”

In fact, he said, we now know that squirming and doodling, often seen as a sign of boredom, can actually help combat it by keeping people more physically alert.

“Research shows that kids who are allowed to fidget learn more and retain more information than those who are forced to sit still,” Professor Fenske said.

We all experience boredom at some points — my flight delay, a droning speaker, a particularly tedious movie. But some individuals are more likely to be bored than others. To help measure this, researchers developed a “Boredom Proneness Scale” in the 1980s.

The scale includes questions like, “Many things I have to do are repetitive and monotonous,” and “I have so many interests, I don’t have time to do everything.”

E-mail: shortcuts@nytimes.com

In a letter, that lawmaker, Representative Edward J. Markey of Massachusetts, told the F.T.C. that he found claims made by the sellers of products like 5-Hour Energy, Monster Energy and Rockstar Energy particularly disturbing because they were often made to appeal to younger people.

In marketing promotions and advertisements, producers of energy drinks typically claim that the products can make users more alert, energized and less fatigued. The request by Mr. Markey follows disclosures that the Food and Drug Administration received reports of 18 deaths in recent years in which energy drinks may have played a role; producers deny any link.

“The advertising claims made by energy drink manufacturers are particularly alarming in light of the increase in advertisements targeted primarily to children and teenagers,” Mr. Markey wrote.

A spokeswoman for the F.T.C., Betsy Lordan, said the agency would consider Mr. Markey’s request. She declined to say whether the F.T.C. was already examining energy drink promotions.

Energy drink makers have said that the claims they have made for their products are supported. They have added that they do not market the beverages to children, a group defined by the industry as those under 12 years of age.

Public officials are looking into the marketing claims of energy drink manufacturers, including the attorney general of New York State and the top lawyer for the city of San Francisco. Newsday reported this week that the Suffolk County Board of Health on Long Island urged county lawmakers to ban the sale of energy drinks to people younger than 19. The board cited potential health dangers that have been associated with the drinks, including elevated heart rates and higher blood pressure, dizziness and possible death.

In his letter, Mr. Markey asked the F.T.C. whether it believed any of the claims made by energy drink producers were deceptive or fraudulent and, if so, whether the agency planned to take any actions in response.

In 2010, both the F.T.C. and the F.D.A. took action against companies that were selling beverages that were a mix of energy drinks and alcohol.

— Matthew 20:16

SO it was in the Great Recession, according to a new survey of the world’s 300 largest metropolitan areas.

None of the wealthiest areas in the world escaped the downturn, and most of them have yet to fully recover more than four years after the downturn began. But nearly half of the poorest areas never suffered any decline, and most of those that did have recovered.

The survey, released by the Metropolitan Policy Program of the Brookings Institution, found that this year the pattern began to change. Growth rates slowed from 2011 in most areas, but the trend was less pronounced in wealthier areas. North America was the only region where more than half of the metropolitan areas grew faster than they had in 2011.

“The global metropolitan economy is fragile and many problems, like the falling euro zone and the slowdown of emerging economies, are here to stay, at least for the immediate future,” said Emilia Istrate, an associate fellow at Brookings. “Despite their challenges, U.S. metro economies are helping to power the global recovery.”

The survey looked at two measures of growth — gross domestic product and jobs — but did so in slightly different ways. It measured the change in per-capita G.D.P. but looked at total employment without adjusting for population change.

Within the United States, only three of the 76 metro areas measured are estimated to have fully recovered in both employment and per capita G.D.P. — Dallas, Pittsburgh and Knoxville, Tenn. Within the euro zone, nearly all major metro areas in Germany and Austria have recovered, but none outside those countries have done so. Nor have any of the major British areas.

Similarly, while more than three-quarters of the 48 Chinese areas have fully recovered, if they declined at all, none of the 12 Japanese areas have done so. While growth slowed this year in China, it still dominated the list of the fastest-growing regions.

The 300 metropolitan areas in the survey are the largest in the world in terms of G.D.P. and together account for nearly one-half of global output, Brookings said. But they include just 19 percent of the world population. The 2012 figures were estimated by Brookings based on data from Oxford Economics, Moody’s Analytics and the United States Census Bureau.

The accompanying charts break down the results by both wealth and region. Brookings found that 40 of the 300 regions did not suffer even one annual decline in employment or per capita G.D.P. from 2008 through 2012. Most of them were in the bottom fifth of areas, as measured by per capita G.D.P. in 2007, before the recession began. None were in the areas that made up the wealthiest half of the world.

The charts show the proportion of areas that experienced no decline, as well as the proportion that have fully recovered in both economic growth and employment and those that recovered by one measure but not the other. While most fell in 2008 and later made at least partial recoveries, there are a few, notably in Australia, that escaped pain early on but declined this year as Chinese growth — and demand for some imports — slowed.

This is the third year that Brookings has done the study, although it includes more areas than the previous studies did. One sad fact remained constant. Athens was the worst performer in 2012, as it had been in the previous years. The good news, if you can call it that, is that things are getting worse more slowly. Brookings estimates employment in the Athens area declined 6.9 percent in 2012, while per capita G.D.P. fell 5.1 percent. Both declines are greater than in any other area this year, but they are smaller than the ones Athens recorded in 2011.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

So I couldn’t help but be skeptical when I was told about a plan aimed at small-business owners in their 50s who have saved little for retirement but can now afford to put aside a lot of money each year. They can then deduct that money as a business expense, resulting in a significant tax savings.

But I checked with the Internal Revenue Service, and the plan is indeed legitimate.

It is a defined-benefit plan, much like the one large employers once regularly offered their workers, that guarantees a set monthly payment in retirement. In this case, though, the plan works best for really small businesses — those that employ just one or two people.

The I.R.S. allows a maximum annual contribution to the plan of about $255,000 for people in their 50s. (For younger workers, the contribution limit is lower, because the calculation is based on the number of years until retirement. In some cases, the limit is so low that other retirement savings options might be better.) Total holdings in the plan are limited to $2.3 million to $2.4 million, enough to cover the maximum allowed payment in retirement of $200,000 a year.

Advisers said the plans were less effective in companies with more employees, particularly older ones, because the owner would be required to make contributions for all of them, and at a high level, since older employees are typically better paid and closer to retirement. (If the additional employees were young and low-paid, the cost of offering the plan to them might be low enough for it to make sense.)

“It’s not too good to be true,” said Lisa C. Germano, president and general counsel at Actuarial Benefits and Design Company in Midlothian, Va. “But you need to be able to fund the plan and fund it for an indefinite period. It’s a commitment. That’s one of the reasons you get the reward.”

Some advisers like Ms. Germano were worried that, like other generous deductions, this one could be threatened in the current tax and budget negotiations. But regardless of how the talks in Washington turn out, this is still the time of year when many small-business owners need to decide whether to set up a defined-benefit plan or stick with more traditional forms of retirement savings, like SEP I.R.A.’s for the self-employed or a profit-sharing plan.

Here is some of what I learned.

UPSIDE Defined-benefit plans are mainly a way for small-business owners who neglected to save for retirement to catch up. The ideal candidates can put away $100,000 to $150,000 a year for at least 10 years, said Leigh Goldblatt, vice president and chief compliance officer at Glazer Financial Network.

This was the case with John Rogers, a Denver businessman. “I was in my late 50s and I didn’t have a penny saved for retirement,” he said.

He lost his life savings in his 40s, he said, in a recycling company he started with friends. He also raised six children, four of whom he said he put through college.

But by 2006, he was six years into being an independent contractor for Univera, a company that makes nutritional supplements. (The company’s sales model is similar to Amway’s, where people like Mr. Rogers sell to individuals or find other people to sell for them.)

With his business providing steady, predictable income — he and his wife are ranked as top sellers for the company — he wanted to start saving. He said a defined-benefit plan was attractive for both deferring taxes and for saving for retirement.

“Our adviser tells us at the beginning of the year what we have to contribute,” said Mr. Rogers, 63. “We’re very disciplined. We pay our defined-benefit plan first and then our business expenses.”

But even though the I.R.S. assumes the plan will make monthly payments in retirement, which is why it allows people to save so much over a short period of time, owners shut down most of these plans and roll the money in them to a regular retirement account, said Mr. Goldblatt, whose firm advised Mr. Rogers. This reduces expenses and gives the owner control over how to withdraw the money.

DOWNSIDES Such a chance for a retirement savings do-over, as it were, does not come without catches. And skeptics say these plans lure people with the prospect of quick and large retirement savings without discussing the risks.

But that began to change a few years ago, when the city’s largest hospital, St. Luke’s Health System, began rapidly buying physician practices all over town, from general practitioners to cardiologists to orthopedic surgeons.

Today, Boise is a medical battleground.

A little more than half of the 1,400 doctors in southwestern Idaho are employed by St. Luke’s or its smaller competitor, St. Alphonsus Regional Medical Center.

Many of the independent doctors complain that both hospitals, but especially St. Luke’s, have too much power over every aspect of the medical pipeline, dictating which tests and procedures to perform, how much to charge and which patients to admit. In interviews, they said their referrals from doctors now employed by St. Luke’s had dropped sharply, while patients, in many cases, were paying more there for the same level of treatment.

Boise’s experience reflects a growing national trend toward consolidation. Across the country, doctors who sold their practices and signed on as employees have similar criticisms. In lawsuits and interviews, they describe increasing pressure to meet the financial goals of their new employers — often by performing unnecessary tests and procedures or by admitting patients who do not need a hospital stay.

In Boise, just a few weeks ago, even the hospitals were at war. St. Alphonsus went to court seeking an injunction to stop St. Luke’s from buying another physician practice group, arguing that the hospital’s dominance in the market was enabling it to drive up prices and to demand exclusive or preferential agreements with insurers. The price of a colonoscopy has quadrupled in some instances, and in other cases St. Luke’s charges nearly three times as much for laboratory work as nearby facilities, according to the St. Alphonsus complaint.

Federal and state officials have also joined the fray. In one of a handful of similar cases, the Federal Trade Commission and the Idaho attorney general are investigating whether St. Luke’s has become too powerful in Boise, using its newfound leverage to stifle competition.

Dr. David C. Pate, chief executive of St. Luke’s, denied the assertions by St. Alphonsus that the hospital’s acquisitions had limited patient choice or always resulted in higher prices. In some cases, Dr. Pate said, services that had been underpriced were raised to reflect market value. St. Luke’s, he argued, is simply embracing the new model of health care, which he predicted would lead over the long term to lower overall costs as fewer unnecessary tests and procedures were performed.

Regulators expressed some skepticism about the results, for patients, of rapid consolidation, although the trend is still too new to know for sure. “We’re seeing a lot more consolidation than we did 10 years ago,” said Jeffrey Perry, an assistant director in the F.T.C.’s Bureau of Competition. “Historically, what we’ve seen with the consolidation in the health care industry is that prices go up, but quality does not improve.”

A Drive to Consolidate

An array of new economic realities, from reduced Medicare reimbursements to higher technology costs, is driving consolidation in health care and transforming the practice of medicine in Boise and other communities large and small. In one manifestation of the trend, hospitals, private equity firms and even health insurance companies are acquiring physician practices at a rapid rate.

Today, about 39 percent of doctors nationwide are independent, down from 57 percent in 2000, according to estimates by Accenture, a consulting firm.

Many policy experts have praised the shift away from independent medical practices as a way of making health care less fragmented and expensive. Systems that employ doctors, modeled after well-known organizations like Kaiser Permanente, are better positioned to coordinate patient care and to find ways to deliver improved services at lower costs, these advocates say. Indeed, consolidation is encouraged by some aspects of the Obama administration’s health care law.

“If you’re going to be paid for value, for performance, you’ve got to perform together,” said Dr. Ricardo Martinez, chief medical officer for North Highland, an Atlanta-based consultant that works with hospitals.

The recent trend is reminiscent of the consolidation that swept the industry in the 1990s in response to the creation of health maintenance organizations, or H.M.O.’s — but there is one major difference. Then, hospitals had difficulty managing the practices, contending that doctors did not work as hard when they were employees as they had as private operators. This time, hospitals are writing contracts more in their own favor.

LONDON — United Parcel Service said on Friday that it had submitted concessions to European antitrust authorities as it seeks regulatory approval for its proposed takeover of the Dutch shipping company TNT Express.

U.P.S. said the remedies would include the sale of certain business units and the granting of access to some of its airline network to rivals. The company, based in Atlanta, did not provide specifics on which of its operations would be sold.

European antitrust authorities had raised concerns that the proposed 5.2 billion euro, or $6.8 billion, takeover of TNT Express would significantly reduce competition in the Continent’s package delivery sector.

Joaquín Almunia, the European competition commissioner, had called on U.P.S. to offer significant concessions to gain regulatory approval for the takeover.

‘‘The proposed remedies aim to address the European Commission’s concerns regarding the competitive effects of the intended merger on the international express small package market in Europe,’’ U.P.S. said in a statement on Friday.

U.P.S. added that the concessions would not change the terms of its offer for TNT Express.

As part of the concessions, the deadline for European regulators to rule on the takeover has been extended until Feb. 5.

The continuing antitrust concerns have weighed on the deal since it was first announced in March. Stock in TNT Express is currently trading at a 20.5 percent discount to U.P.S.’s offer of 9.50 euros-a-share, though TNT’s share price has risen around 41 percent over the last 12 months.

TNT Express announced earlier in November that it would sell its airline operations to win antitrust approval for the deal with U.P.S.

ASL Aviation, which already owns 90 aircraft used for freight and passenger services, had agreed to buy Group TNT Airways and Pan Air Lineas Areas, which are both owned by TNT. The sale, whose financial terms were not disclosed, is dependent on U.P.S.’s successful take over of TNT Express.

If U.P.S. succeeds in its multibillion-dollar offer, the deal would be largest acquisition in the 105-year history of the American company, whose biggest purchase to date was its $1.2 billion takeover of the Overnite Corporation, in 2005, according to data from Capital IQ.

Vinod Khosla, founder of Khosla Ventures.Stephen Lam/ReutersThe venture capitalist Vinod Khosla at the TechCrunch Disrupt conference in San Francisco in September.

Vinod Khosla crowed about the clean energy industry last year. Three of the biofuel start-ups in his venture capital portfolio had just gone public, and the stocks had risen considerably after their debuts. “I challenge anybody to claim that clean tech done right is a disaster,” Mr. Khosla said at a conference, rebuffing recent criticism. “We’ve generated more profits there than anybody has.”

Since then, Mr. Khosla, the founder of Khosla Ventures, has watched much of those paper gains evaporate. As the clean energy industry broadly has taken a hit, shares of the biofuel companies — Amyris, Gevo and KiOR — have slumped 70 percent to 90 percent from their peaks. His stakes, once worth as much as $1.3 billion, are now valued at roughly $378 million.

The billionaire investor has been caught in the cyclical downdraft.

The public stocks of solar, wind and biofuel companies are suffering amid industrywide pressures. The price of natural gas remains low. Europe has pulled back on incentives. American subsidies are in question after the bankruptcy of the solar panel maker Solyndra. And China is providing formidable low-cost competition.

“The whole clean tech sector has been out of favor,” said Pavel Molchanov, an analyst at Raymond James & Associates, a brokerage firm. “I’d be hard pressed to name one trading above its I.P.O. price.”

Despite the crosscurrents, Mr. Khosla seems unwavering in his commitment. He is pouring money into start-ups. Khosla Ventures recently invested more in LightSail Energy, a three-year-old start-up working to develop low-cost energy storage. He is also sticking with his public companies. His firm, for example, still owns 54 percent of KiOR.

“He’s a visionary who likes to make big bets on ideas that can really change the world,” said Andy Bechtolsheim, who co-founded Sun Microsystems with Mr. Khosla 30 years ago and shares a house with him at Big Sur on the California coast. “I would think he’s made a larger personal bet on green tech than anybody else.”

While the public markets are raising short-term doubts, the long-term investment thinking remains unchanged. Governments around the globe are pushing to find alternative sources of energy in an effort to reduce their dependence on fossil fuels that may hurt the environment. In a television interview in 2007, Mr. Khosla said “mainstream solutions” could replace up to 80 percent of oil-based power. Without them, he said, “this planet is history the way we know it today.” After Hurricane Sandy, the subject of global warming — and changing climate conditions — has again come to the forefront.

In a recent blog post on the Forbes Web site, Mr. Khosla acknowledged the shift in market sentiment. “Clean tech went through a time when it was in vogue and now it is not,” he wrote. “The financing environment for clean tech companies is tough today,” he added. But he said he still expected “to do better than industry averages by keeping our losing companies to a minority.”

Since founding his venture capital firm in 2004, Mr. Khosla has become one of the most vocal advocates for clean tech innovation, buying stakes in about 60 industry start-ups. Ausra, a solar thermal start-up that had drawn $130 million in venture backing, was sold in 2010 to the French nuclear plant builder Areva for about $250 million, according to one industry estimate. And SeaMicro, a low-power server maker, was bought this year by Advanced Micro Devices for $334 million, more than five times the amount invested by its venture backers, according to a SeaMicro co-founder, Andrew Feldman.

It’s unclear how the broader clean tech portfolio has performed at Khosla Ventures. Mr. Khosla declined to disclose the firm’s returns or to comment for the article.

But one of his funds, which raised $1 billion to invest in clean tech and other start-ups, shows gain of 30 percent since its inception in 2009, according to filings by the California Public Employees’ Retirement System, the largest state pension fund. In his Forbes blog post, Mr. Khosla said a recent fund, which raised $1.05 billion in October 2011, was oversubscribed, and his firm’s broader performance since 2006 had “well exceeded typical venture funds.” In that period, venture funds over all have returned 7.25 percent annually after fees, according to industry data.

Mr. Khosla’s commitment is an outgrowth of his three decades at the cutting edge of technology.

A native of India, Mr. Khosla, 57, earned a master’s degree in biomedical engineering from Carnegie Mellon and an M.B.A. from Stanford in 1980. After starting the design automation company Daisy Systems in 1982, he co-founded Sun Microsystems, then a growing technology company.

At Sun, he supplied drive and vision. But Mr. Khosla, who is known for his blunt talk and intense manner, was replaced as chief executive two years later and left the company shortly thereafter.

In 1986, he joined the venture capital firm Kleiner Perkins Caufield & Byers. Over the next two decades, Mr. Khosla scored sizable returns betting on the growth of fiber optic networks. Two companies, Cerent and Siara Systems, were sold for a combined $15 billion-plus at the height of the late-1990s dot-com bubble.

Mr. Khosla was looking into alternative fuel technologies at Kleiner Perkins when a business plan for an ethanol start-up crossed his desk in 2003. The plan “sat on a corner of my desk for nearly 18 months while I read everything I could about petroleum and its alternatives,” he wrote in an article for Wired magazine in 2006.

When he branched out on his own in 2004, Mr. Khosla invested millions in the ethanol start-up, Celunol. He soon established himself as a top venture capitalist in clean tech, attracting prominent outside investors like Microsoft’s founder, Bill Gates. Former Prime Minister Tony Blair of Britain joined the firm as a senior adviser.

Over the years, Mr. Khosla has experienced his share of blowups.

In September 2011, Khosla-backed Range Fuels, a wood-chips-to-ethanol company, went bankrupt after receiving a $44 million grant from the Department of Energy and $33 million under a Department of Agriculture loan guarantee. When The Wall Street Journal editorial page criticized Range Fuels as an “exercise in corporate welfare,” Mr. Khosla lashed back, saying the authors inhabited an “ivory tower” that was “full of people who don’t understand technology.”

Sometimes, Mr. Khosla’s companies had to pivot from their original plans and focus on new markets. For example, Calera was founded in 2007 with plans to use power plant exhaust to make cement. Mr. Khosla called its technology “game changing” in 2008.

But the company encountered some setbacks. It postponed plans for commercial-scale production in 2010 pending further research and later cut its 145-employee work force by two-thirds. Since then, Calera has broadened its focus, developing other products like fillers for paper and plastics.

Like many venture capital investors, Mr. Khosla will risk a few strikeouts for the chance to hit home runs. “My willingness to fail is what gives me the ability to succeed,” the investor has said frequently.

The odds can be especially brutal in clean technology. The projects are often capital-intensive — like $200 million or more for a biofuels plant — and they can take years to pay out, said Sam Shelton, a research engineer at Georgia Institute of Technology. By comparison, social media start-ups often require little upfront money and few employees. “The economics are totally different,” Mr. Shelton said.

In part, Mr. Khosla aims to take stakes when the companies are still getting off the ground, rather than waiting until they’re more mature and more expensive. He first bought a stake in KiOR, which aims to convert wood chips to gas and diesel fuel, in 2007. The company is now completing the first of five planned plants in Mississippi with the help of a $75 million interest-free loan from the state.

Mr. Khosla is “always thinking at a very high level about the potential of an idea,” KiOR’s chief executive, Fred Cannon, said. “He has a very good feel for when to step on the gas.”

After jumping in early, Mr. Khosla appears willing to ride out the swings, in both directions. Over the years, public filings indicate he has plowed roughly $80 million into KiOR, amassing a 54 percent stake in the company. Although the stock is off its peak levels and I.P.O. investors are still underwater, his holdings are worth $356 million — a threefold gain.


This post has been revised to reflect the following correction:

Correction: November 30, 2012

An earlier version of this article mischaracterized Mr. Khosla’s return on his investment in KiOR. He invested roughly $80 million and his holdings are worth $356 million — a threefold gain, not a fourfold gain.