Hayek meant that governments can't plan economies without planning people's lives. After all, an economy is just individuals engaging in exchanges. The scientific-sounding language of President Obama's economic planning hides the fact that people must shelve their own plans in favor of government's single plan.
From John Stossel here.
It boils down to this; The government is trying to fit you, the round peg, in it's square hole. You don't fit and yet they keep pounding on you.