Yesterday, Trump said about Nippon’s purchase of U.S. Steel that “There’s never been a $14 billion investment in the history of the steel industry in the United States.”
In terms of nominal dollars he’s correct. In terms of inflation-adjusted dollars he’s (probably) incorrect.
In 1901 J.P. Morgan paid $480 million for Carnegie Steel (to create U.S. Steel). Using the price index created by the Minnesota Federal Reserve, we find that today it takes $37.71 dollars to buy what one dollar bought in 1901.
Thus, converting the $480 million paid in 1901 for Carnegie Steel into 2024 dollars (the latest year for which this index is available), we find that Carnegie Steel was sold, 124 years ago (in 2024 dollars), for $18,100,800,000. Just fyi.
To be fair, comparing the purchasing power of a dollar today to that of a dollar 124 years ago is extremely iffy. About all we can really say is that inflation over the past century-plus has significantly reduced the dollar’s purchasing power. Any precise value of this inflation over such a long stretch of time must be taken with a grain (or two) of salt. Nevertheless, because the dollar’s value has indeed fallen significantly since 1901, the inflation-adjusted value of what J.P. Morgan paid for Carnegie Steel is plausibly in the range of, and likely greater than, what Nippon is paying today for U.S. Steel.
