It is as Bastiat said of the mixed economy. We will never know for sure what innovations never became a living part of our economic world because regulations hamstrung the innovators.

Lest we forget, amidst the daily/weekly/monthy/yearly ups and downs of the market, the market is an historically off-the-charts (almost literally) innovation machine. Be happy that you live when you do and, if you live in the first world, where you do.

The worst thing I heard from Mr. Obama this morning was his assertion that we can’t cut spending that makes the economy grow, or words to that effect. Our President is channeling J.M. Keynes and FDR. Government spending can’t make the economy grow. It never has, never will. Otherwise, just let the government run the economy in its entirety if they think they can make it grow. We all recall the places where that has been tried and the results of that policy. It happened here during the FDR regime when he tried to substitute central economic planning for market forces. The Great Depression lasted about 20 years. But then, we are witnessing the Theater of the Absurd. Like those Existentialist plays, it is as if we are trapped in an incomprehensible world, devoid of meaning, reason, and morality, and where gibberish is substituted for rational thought and discussion. I don’t think this will be a spectacle that we will enjoy watching.

The reasons for the failure of central planning are well known and well understood. I see nothing that is inapplicable to health care or education. The growing risk is that American education and health care will grow the attributes of Soviet era industrialization.

One interesting comparison from a few years ago by Robert L. Ohsfeldt and John E. Schneider, which appears in their 2006 book The Business of Health, compares actual life expectancy rates across countries to a “standardized rate” that is calculated after taking out fatal injuries due to causes like driving deaths and murder (using OECD data). I was surprised to see that if you leave out fatal injuries, it turns out that that average U.S. life expectancy vaults from near the bottom of the list of high-income countries up to the top.

We have had an intervention that countered the Federal Reserve’s stimulus program. The intervention persists through today. The QE2 Federal Reserve program is ending momentarily. There is turmoil in the sovereign debt arena that we read about in the headlines. We have a slowing economy, exacerbated by weakness in the labor force and the housing sector, that has not healed. What more uncertainty could one ask for? An additional uncertainty came in the form of a political intervention in the oil price, where an agency decided with other agencies and political bodies to release reserves of oil in an attempt to drive the price down.