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As a new president contemplates his agenda amidst a deep recession and global financial crisis, he should remember his best friend: innovation. The combination of technology and entrepreneurial creativity drives all real long-term growth. But today market volatility pushes our panic buttons, and short-term hysterics unlock the vaults of the Keynesian kingdom. In these uncertain times, we forget just how far and how fast the world moves. And how many crises innovation transcends.

Think back, for example, to the last Democratic transition, when Bill Clinton ascended to the Oval Office in 1992. It was only 16 years ago, but it nevertheless offers a gauge for the pace of change. The Soviet Union had just collapsed, Apple Computer was in the doldrums versus the Windows juggernaut, and that other unstoppable force, Miley Cyrus (aka "Hannah Montana"), had just been born. The Internet was but a blip to most Americans, as were real coffee and wine. There was no "genome," and there were no digital cameras. The "Facebook" I received as I arrived for my freshman year of college that autumn was printed on paper and played no part in the presidential campaign.

Today, an average consumer can buy a terabyte hard drive (1 million megabytes), on which she might store her family photos, videos and other digital documents for as little as $109.99. In 1992, a terabyte drive, if such a thing had existed, would have cost $5 million. The chief digital storage medium at the time was the 3.5-inch floppy disk, which held 1.4 megabytes. When digital photos came along and consumers found the huge square disk could only hold one photo, it was instantly obsolete.

In mid-2008, the four-gigabyte (or 4,096 megabytes) flash memory chip in an iPod Nano cost $25. Late in 2008, four-gigabyte flash cards and USB drives are selling for $14.99. But back in 1992, four gigabytes of flash memory would have cost $500,000. This means a hypothetical iPod Nano circa 1992 would have set back the teenage Nirvana or Boyz II Men fan around $3 million.

Apart from research scientists and a few early adopters of Compuserve and AOL, the Internet essentially didn't exist in 1992. Monthly Internet traffic was four terabytes. All the data traversing the global net in 1992 totaled 48 terabytes. Today, YouTube alone streams 48 terabytes of data every 21 seconds.

Biology is also on the innovation curve and is likely to accelerate. When the Human Genome Project began in the early 1990s, sequencing one DNA base pair cost about $10. Craig Venter famously began his own competing genome search in 1998 and completed the project simultaneously, at around one-tenth the cost. Today sequencing one base pair costs a tenth of a cent, and by 2024--just 16 short years from today's presidential transition--we'll sequence an entire human genome (yours, if you'd like) for $100.

In 1992 a tiny percentage of Chinese citizens had ever made a phone call, but today there are twice as many mobile-phone subscribers in China as there are people in the U.S. The entirety of U.S.-China trade in 1992 was $33 billion. This year it will approach $400 billion. Trade with India in 1992 was just $5.7 billion, but is now $35 billion. All world output in 1992 was $20.4 trillion, about the size of today's output from U.S., Japan and Germany. Imagine the rest of the world didn't exist. That was 1992.

Now imagine how similar innovation going forward will utterly transform all our industries, from medicine and mining to agriculture, energy and education. Or further imagine an accelerated pace of innovation. It's possible.

But innovation is by definition unexpected. We can't force it or compel it. Certainly not from Washington. The dramatic centralization of money, power, information and influence now under way seriously threatens the entrepreneurial revelations and technological revolutions that drive long-term growth. If we quasi-nationalize the energy, finance, auto and health care markets, and possibly bar dynamic new business models on the Internet, as with possible network neutrality regulation, we will close off many of the most promising paths to needed efficiencies and, more important, new wealth.

If Washington had planned our future in 1992, we wouldn't be here. Technology and ingenuity can overcome many government mistakes and bloat. But at some point, our short-term fixes and obsessions with certainty will block the entrepreneurial acts so essential to long-term security. In many ways, they already have.

When things look bleak, look back. You will see how bright tomorrow can be.