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State Department Pays $6,600 per Kindle for 2,500 Kindles
Economic Policy Journal ^ | 6-12-12 | Economic Policy Journal

Posted on 06/13/2012 12:25:56 AM PDT by JohnKinAK

Yup, the State Department has awarded a $16.5 million contract to Amazon to stock designated libraries and U.S.-friendly educational centers around the world with 2,500 Kindle e-Readers, procurement databases show, according to Nextgov.com. The contract includes 50 titles, a secure central management system and round-the-clock help desk service.

The purchase works out to a cost of $6,600 per reader. No doubt there may be extra support and software that comes with these Kindles, but $6,000 plus worth? Kindle's on Amazon's web page now sell for between $79 and $379.

Is this a procurement horror story reminiscent of years past that saw the Defense Department by claw hammers for $435, toilet seats for $640 and coffee makers for $7,600? It sure smells like it. But don't expect the State Department to own up to it.

During the Reagan Administration, when President Reagan learned of the outrageous prices for hammers, toilet seats and coffee makers along with news that the military was paying $1,118.26 for a spare plastic cap for a navigator’s stool on a B-52 bomber (worth about two cents), he demanded answers from Secretary of Defense Casper Weinberger. Weinberger promised he would get to the bottom of the outrageous prices.

What happened though is that Weinberger appeared on Capitol Hill and defended the shocking prices.

Murray Rothbard made the case that all government spending is waste and should be subtracted from GDP and this is correct. As Mark Thornton writes:

...government spending does not have its value tested with consumers in the market, and much of the spending is actually bad for the economy. Government could pay people to dig ditches and other people to fill the same ditches, [Or it could pay $6,600 for kindles!-RW] and it would increase GDP, but no one argues this is the path to prosperity...

Murray Rothbard addressed the problem of measuring a big government economy with the concept of private product remaining (with producers), or PPR, which basically takes GDP and subtracts from it twice the amount of government spending. Government spending is subtracted once to obtain gross private product and it is subtracted again to account for all the resources that government has siphoned off from the private sector.

Rothbard has the theoretical point about ALL government spending right, but it is nice to come across an example of government spending that appears so totally absurd, that even Warren Buffett and Henry Blodget will have to think twice before defending the expenditure and calling for higher taxes to pay for the expenditure. It's a teaching moment.

Clearly, what really needs to go on is cutting of government expenditures and cutting and cutting. Not increasing taxes to pay for bureaucratic government spending.


TOPICS: Government; News/Current Events
KEYWORDS:

1 posted on 06/13/2012 12:26:05 AM PDT by JohnKinAK
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To: JohnKinAK

This needs to get out. And we need to show outrage!


2 posted on 06/13/2012 12:30:28 AM PDT by Yaelle
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To: JohnKinAK
I can't conceive of how this happened. I was trying to think of how many books a Kindle would have to come with to cost that much - around 600 recently published books. Or maybe the books are super-expensive technical manuals and the Kindles are being used for something unique?

Or the Kindles are coming with pre-paid international wireless internet access?

Unless some answer comes forth, this procurement mess is exactly why everything the government touches eventually turns to crap. No market forces = no accountability.

3 posted on 06/13/2012 12:30:28 AM PDT by 92nina
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To: 92nina
Ah - an update.

Update: After some discussions with Amazon and the State Department, we've learned the price tag on the Kindle contract is not as cut and dry as we first reported. The contract authorizes the State Department to pay Amazon up to $16.5 million over five years for an English-language teaching program and the 2,500 Kindles cited in the procurement documents has been described to us as merely the initial order. We do not know the maximum amount of Kindles the State Department can purchase in their deal with Amazon. Still, it's clear that our $6,600-per-Kindle calculation is not accurate. Previously: we reached out to the State Department's Philippe Reines, who emailed to say that the department was getting the actual Kindle devices for 10 percent off retail price. The rest of the cost goes to cover the service and content-providing agreements in the department's four-year contract with Amazon.

http://www.theatlanticwire.com/global/2012/06/state-department-buying-english-teaching-kindles-6600-each/53407/

4 posted on 06/13/2012 12:31:54 AM PDT by 92nina
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To: JohnKinAK; ding_dong_daddy_from_dumas; stephenjohnbanker; DoughtyOne; Gilbo_3; NFHale; Impy; ...

‘Stimulating the economy’ ping!


5 posted on 06/13/2012 12:33:32 AM PDT by sickoflibs (Romney is a liberal. Just watch him closely try to screw us.)
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To: JohnKinAK

I wish another FReeper could explain it to me, but why do some say the economy is growing? GDP is expanding at about 2% per year, right? At the same time, government is borrowing about $1.5 trillion or 10% of GDP every year. So, how is this considered a growing economy? Doesn’t that work out to something like an 8% decline in real GDP?


6 posted on 06/13/2012 12:47:37 AM PDT by CitizenUSA (Why celebrate evil? Evil is easy. Good is the goal worth striving for.)
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To: 92nina
Unless some answer comes forth, this procurement mess is exactly why everything the government touches eventually turns to crap. No market forces = no accountability.

The best proof of this that I ever saw, in my own mind, was the snack bar at Island Beach State Park in New Jersey, back in the day. It's a substantial piece of geography completely under state control, an "idyllic" version of the numerous municipal beaches along the Jersey coast. If you took a picture of the snack bar, it would look like what you might expect, with customers standing and waiting for their orders. But if you took another picture 10 minutes later, you would see the same customers standing in the same places waiting for the same orders. As I stood there, I couldn't imagine a clearer example of the lack of motivation on the part of the snack bar attendants, their supervisors, or indeed the State of New Jersey, to provide prompt or satisfactory service to the clientele.

7 posted on 06/13/2012 12:50:25 AM PDT by dr_lew
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To: JohnKinAK

Hey. The government knows best. We down here don’t don’t didley. That is why the government is going to control everything. So they paid a little more. They know what they are doing. So we need to STFU about this kind of thing.


8 posted on 06/13/2012 1:02:26 AM PDT by oyez ( Affordable Health-care is neither affordable nor health-care.)
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To: JohnKinAK

Hey. The government knows best. We down here don’t don’t didley. That is why the government is going to control everything. So they paid a little more. They know what they are doing. So we need to STFU about this kind of thing.


9 posted on 06/13/2012 1:05:09 AM PDT by oyez ( Affordable Health-care is neither affordable nor health-care.)
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To: JohnKinAK

10 posted on 06/13/2012 1:05:25 AM PDT by I see my hands (It's time to.. KICK OUT THE JAMS, MOTHER FREEPERS!)
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To: JohnKinAK

Six thousand bucks apiece?

Hey, why not - it’s not their money, after all, it’s only the blood, sweat, and tears of the taxpayers.

So who gives a rat’s *ss about ‘em.


11 posted on 06/13/2012 1:08:12 AM PDT by Jack Hammer
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To: All

I don’t care about the details. This is a complete waste of money. I missed the part of the Constitution which authorizes the government to confiscate my money to buy frivolous items to send to people in other countries.


12 posted on 06/13/2012 1:28:18 AM PDT by Politicalmom (THIS IS NOT A GOP CHEERLEADING SITE!!!)
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To: JohnKinAK

There is one thing the Federal Government does extremely well: waste money. Nobody does it better.


13 posted on 06/13/2012 1:34:11 AM PDT by microgood
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To: JohnKinAK

The purchase works out to a cost of $6,600 per reader

.....so what, you’re still not paying your fair share!!!


14 posted on 06/13/2012 2:45:59 AM PDT by Recon Dad (Gas & Petroleum Junkie)
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To: JohnKinAK
"$16.5 million contract to Amazon"

Amazon?? Smart move. They get to avoid state and local Sales Tax. /sarc

15 posted on 06/13/2012 3:37:18 AM PDT by radioone
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To: Yaelle

Good luck with that.
This is so small compared to the rest of the crap...


16 posted on 06/13/2012 4:15:20 AM PDT by Eric in the Ozarks
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To: JohnKinAK

I buy books from the library.
I donate them back to the library so hey can sell them again when I am done.
The cost is pretty insignificant when compared to the price at the store.

$6600 dollars for a book is pretty ridiculous when I don’t even like to read books off a computer. I like to hold them in my hand dogear the corner to keep my place, take them to the bathroom with me, read them at night in the bed.


17 posted on 06/13/2012 4:25:36 AM PDT by Venturer
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To: Venturer

Hey, Kindle needs a Dog-Ear app! :)


18 posted on 06/13/2012 4:34:18 AM PDT by libertarian27 (Check my profile page for the FReeper Online Cookbook 2011)
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To: JohnKinAK

The price is reasonable for what is being required in the contract. It’s the contract specs that are overkill. The maintenance and support infrastructure and requirement for 3G access as well as Wi-Fi is driving the per unit price up. Perhaps whoever did the RFP should consider the cost of the scope and back off a bit.


19 posted on 06/13/2012 4:36:01 AM PDT by mikey_hates_everything
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To: CitizenUSA
Good point. Here's the inflation adjusted GDP:



adjusted by CPI, unemcumbered by 'enhancements that suppress inflation:


20 posted on 06/13/2012 4:48:48 AM PDT by khelus
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To: 92nina

Which brings up the question: why is the state department in the business of teaching English ?


21 posted on 06/13/2012 4:53:41 AM PDT by khelus
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To: 10thAmendmentGuy; 383rr; Abathar; abbi_normal_2; Abcdefg; Abram; Abundy; Aevery_Freeman; ...

Libertarian ping


22 posted on 06/13/2012 4:56:22 AM PDT by Clintonfatigued (Obama and Company lied, the American economy died)
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To: mikey_hates_everything

http://www.freerepublic.com/focus/f-news/2894687/posts?page=21#21


23 posted on 06/13/2012 4:56:22 AM PDT by khelus
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To: 92nina
Still, it's clear that our $6,600-per-Kindle calculation is not accurate. Previously: we reached out to the State Department's Philippe Reines, who emailed to say that the department was getting the actual Kindle devices for 10 percent off retail price.


24 posted on 06/13/2012 4:58:45 AM PDT by dead (I've got my eye out for Mullah Omar.)
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To: JohnKinAK

SOMEBODY CALL JOE BIDEN!


25 posted on 06/13/2012 5:39:23 AM PDT by New Jersey Realist (America: home of the free because of the brave)
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To: JohnKinAK

You gotta fund Area 51 somehow! ;-)


26 posted on 06/13/2012 5:44:39 AM PDT by CSM (Keeper of the Dave Ramsey Ping list. FReepmail me if you want your beeber stuned.)
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To: Clintonfatigued

We all know the gobermint is just funneling this money somewhere else. Just like Solyndra. Half a billion disappears?? No, it’s all being used somewhere,funding
some no doubt illegal and un-constitutional enterprise.
We are being controlled by absolute criminals. CRIMINALS,animals, mafia, that’s what these people are. They are examples of absolute CORRUPTION and evil personified.


27 posted on 06/13/2012 6:12:09 AM PDT by 383rr (Those who choose security over liberty deserve neither; GUN CONTROL= SLAVERY)
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To: JohnKinAK

Go to your friendly local Apple store and see what $6,000 will buy you, probably a super barn burner of a desk top that even Rush would drool over.


28 posted on 06/13/2012 6:38:26 AM PDT by libstripper
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To: JohnKinAK

Is Amazon paid this amount?

What are the cost to intregrate the Kindle into a secure system?

I can see the costs for a Kindle reaching $1,000 or more. I recently looked into using them for one of our businesses after learning a competitor was using them in his.

Neat idea the guy has but too clunky for even me. I am probably going to go with the Samsung Galaxy tablet and expect the total costs for the tablet, software, integration and support to be around $1,400 per.

Like I’m ever right about what things cost. LOL....It will probably cost more like $2,000 but it’s cheaper and more efficient than any other solution.


29 posted on 06/13/2012 7:09:17 AM PDT by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: 92nina

Each piece of software that goes into a Kindle costs $200-$600 and if this is for something like Pimsleur Learning Each installed Module is $600(it’s how I learned to speakuhduh spanish).

Not cheap and the total for Pimsluer was about $3,000 bucks and that was for English to Spanish.

I can envision the cost for these Kindles costing that much if they only got Modules 1, II, and III for up to 4 languages per Kindle and then throw in the integration costs and custom software telling the user they so lucky to have a tool from the United States to teach them engrish and yea, the costs rise from there.


30 posted on 06/13/2012 7:17:17 AM PDT by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: JohnKinAK

Another example of crony corruption. The base problem facing the USA isn’t politics as much as corrupt politicians taking care of their cronies at our expense.

Does anyone think the decision maker here didn’t have connections with Amazon etc.? Politicians making deals with private business is always a ticket to paybacks, kickbacks, corruption and thievery from taxpayers. We’re becoming like every third world country that has corrupt government workers and politicians on the take and getting very rich on the side.

Every local, state, federal politician and government procurement workers should face yearly mandatory audits and life imprisonment and loss of pension and bennies if they are found guilty of scamming us.


31 posted on 06/13/2012 6:05:49 PM PDT by apoliticalone (Honest govt. that operates in the interest of US sovereignty and the people, not global $$$)
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