Inflation: An Offer You Can't Refuse

I saw The Godfather the other day, for the first time ever – justly considered a classic movie, though The Departed will always have a special place in my heart among gangster movies. I had seen bits and pieces before, though, including the famous scene where Jack Woltz gets a dose of Mafia persuasion when he wakes up to find the severed head of his prize racehorse Khartoum in his bed. (That’s a real horse’s head, by the way. PETA was indignant but apparently didn’t carry enough weight in Hollywood in 1972.)

What caught my ear this time around was Woltz’s proud comment to Don Corleone’s consigliere Tom Hagan, introducing Khartoum on a tour of his estate: “Six hundred thousand dollars on four hooves!” That got me thinking: how much would that be today once you corrected for inflation? It’s often tough to think about monetary amounts in old movies like that because they’re difficult to quantify in today’s money. (Although it’s easy to compare Woltz’s $600,000 in relative terms, for example to the millions the Corleones talk about later… or, more pointedly, to the missing $8,000 that nearly ruins George Bailey in It’s a Wonderful Life, also set in 1945.)

So, like any good economics concentrator, I found some CPI tables and rigged up a chart that shows some inflation “multipliers” - rules of thumb to convert old prices into today’s dollars:

• $1 in 1985 would equal $2 in 2009
• $1 in 1979 would equal $3 in 2009
• $1 in 1975 would equal $4 in 2009
• $1 in 1969 would equal $6 in 2009
• $1 in 1955 would equal $8 in 2009
• $1 in 1945 would equal $12 in 2009
• $1 in 1934 would equal $16 in 2009
  

So Khartoum would be worth about $7.2 million in 2009 dollars – pretty good money for a racehorse. At least until Luca Brasi got ahold of him.