They’ve been saying it on TV, morning and night: “The price of gasoline has risen again to a record high!” said one newscast. “The high prices are making it harder for some to keep their heads above water,” said another. “Record high prices!” we keep hearing. “They don’t even put the price on the sign anymore,” joked Jay Leno on “The Tonight Show.” “It just says, ‘If you have to ask, you can’t afford it.’ “Drivers aren’t laughing. They think what they see at the pump confirms what they’ve heard on TV. One told me the prices are “scary.” A woman said gas was “going up and up and up, and it’s the most expensive it’s ever been.” And she was on a bike.

Well, it’s time to wake up from the gas price nightmare. All these media people are saying the gas prices are high for one simple, simple-minded reason: They are looking at big numbers – but they are not accounting for inflation. So the numbers look bigger than the costs actually are. That’s what inflation does. The reporting is irresponsible and silly. Not adjusting for inflation would mean “Shrek 2” is one of the highest-grossing movies of all time.

If you don’t account for inflation, lots of prices keep going up. Comparing a price in the dollars of the 1930s – when “Brother, Can You Spare a Dime?” referred to a much more meaningful amount of money than a dime is today – to a price in 2004 dollars is like comparing a price in dollars to a price in yen.

It’s not as if the reporters would have to work at doing calculations to figure this out. Not only are there instant inflation calculators on the Web, but the federal Department of Energy accounts for inflation in its annual report of gas prices. It says gas is actually cheaper now than it was throughout most of the 20th century. Yes, it’s 65 cents more than it was six years ago, but it’s nearly a dollar cheaper than it was for much of the 1920s and ’30s – and more than a dollar cheaper than in 1980.

By failing to account for inflation, the media have some Americans so alarmed that we can’t think straight. “What costs more,” I asked customers at a gas station: “gasoline or bottled water?” The answer I got from almost everyone was gasoline.

At that very gas station, water was for sale at $1.29 for a 24 ounce bottle. That’s $6.88 per gallon, three times what the gas station was charging for gasoline.

It gets sillier. I asked gas-station customers, “What costs more, gasoline or ice cream?” Most people said gasoline cost more. But a gallon of gas doesn’t even cost as much as a pint of Haagen-Dazs, let alone a gallon of it. At $3.39 a pint, “premium” ice cream costs about $27 a gallon.

We should marvel at how cheap gasoline is – what a bargain we’re getting from oil companies. After all, it’s easy to bottle water, but think about what it takes to produce gasoline and deliver it. Oil has to be sucked out of the ground, sometimes from deep beneath an ocean, a desert, or ice. To get to the oil, the drills often have to bend and dig sideways through as much as five miles of earth. What they find then has to be delivered through long pipelines or shipped in monstrously expensive ships, then converted into three or more different formulas of gasoline and transported in trucks that cost more than $100,000 each. Then your local gas station must spend a fortune on safety devices to satisfy government regulators and make sure you don’t blow yourself up.

At nearly $2 a gallon (an average of 44 cents of which goes to taxes), gas isn’t expensive – it’s miraculously cheap. But all we hear from clueless people in the media is, “Record high gas prices! And they’re going up and up.” Give Me a Break.

Mr. Stossel is co-anchor of ABC News’s “20/20.” ©2005 By JFS Productions Inc.