The Play's The Thing

Tyler Durden's picture

Submitted by Ben Hunt of Epsilon Theory

We did get something – a gift – after the election. ... It was a little cocker spaniel dog in a crate. … And our little girl – Tricia, the 6-year old – named it Checkers. And you know, the kids, like all kids, love the dog and I just want to say this right now, that regardless of what they say about it, we’re gonna keep it.

      – Richard Nixon, “Checkers” speech after accepting illegal campaign contributions


Cory is here tonight. And like the Army he loves, like the America he serves, Sergeant First Class Cory Remsburg never gives up, and he does not quit. My fellow Americans, men and women like Cory remind us that America has never come easy.

     –Barack Obama, 2014 State of the Union address


You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.

     – William Jennings Bryan, the Boy Orator of the Platte, 1896 Democratic nomination speech


Every man a king, but no one wears a crown.

     – Huey Long, the Kingfish, slogan from 1928 Louisiana gubernatorial campaign


You didn’t build that.

      – Elizabeth Warren, slogan from 2012 Massachusetts campaign for US Senate


The play’s the thing. Wherein I’ll capture the conscience of the king.

      – Shakespeare, “Hamlet”


The Play's The Thing

As usual, I was struck by the pageantry and sheer theatricality of this Tuesday’s State of the Union address. As usual, you had the props – human and otherwise – on full display. As usual, you had the rhetorical flourishes, the ritualized audience behavior, the talking head performances before and after. Unusual for me, though, was the professionally scripted and rehearsed television broadcast production, such that the cameras were trained on the human props before the President referred to them in his speech. A bravura technical performance, to be sure.

Last week’s note focused on the primal human behavior of dance. This week it’s the primal human behavior of theatre, of the representation of stories, particularly the play-within-a-play…a fundamental trope of human story-telling from Hamlet to The Simpsons.

There’s the ostensible meaning of the spoken words and the performance, and there’s the ostensible audience to whom the words and performance are addressed. But then there’s the real meaning of the words, and the real audience to whom the words are addressed. And then maybe there’s a meaning and an audience beyond that. This is the recursive, strategic nature of public communications. These multi-level games are the beating hearts of both politics and economics, and looking at these behaviors through the lens of game theory can help us both see the social world more clearly and call more things by their proper names.

We expect this sort of linguistic game-playing in politics. It's what politicians DO, whether it's Elizabeth Warren's "You didn't build that" speeches putting a modern slant on the same language and imagery of populism and class warfare used by William Jennings Bryan in the 1890's and Huey "Kingfish" Long in the 1920's, or whether it's the entire Republican Party's "Southern Strategy" of coded language to maintain racist voting blocs post the Civil Rights Act of 1964. If you've never read political operative extraordinaire Lee Atwater's infamous interview on the subject, you really should. And yes, I know that Atwater’s point was that overt racist appeals were diminishing in the South as the language changed, but does anyone doubt that Atwater would use language straight from the KKK handbook if he thought it were still an effective campaign tool? It’s not that he thinks racism is wrong or even distasteful in the context of a political campaign, any more than Elizabeth Warren would be opposed to burning Jamie Dimon in effigy (or maybe in person) at her next campaign rally … it’s just an unpopular tactic today, at least in its unvarnished form. But if it works tomorrow? Sure, why not? In the immortal words of Al Davis, “Just win, baby.”

This sort of linguistic game-playing is not a modern phenomenon. It is a quintessential human phenomenon, played just as effectively by Pericles 2,500 years ago as it is by politicians today. My favorite example of a linguistic play-within-a-play was staged 150 years ago by an undisputed American political genius: Abraham Lincoln. We’re all familiar with the Lincoln-Douglas debates as some sort of shining example of civic participation and civil discourse, but few know the politics behind those debates. Lincoln lost that 1858 election to Stephen Douglas for the US Senate (well, he won the aggregate popular vote by a slim margin, but US Senators were still chosen by state legislatures back then, and the allocation of votes within the Illinois legislature gave Douglas a clear victory). But the way he lost that Senate race … the way Lincoln played the game … won him the Presidency in 1860.

Here was the central question of those debates, the way in which Lincoln framed the language of the debate to give himself the best chance of winning the larger political game: should the citizens of a Territory have the right to decide whether or not to allow slavery in that Territory? Every time Douglas tried to move the debate to some other topic (and seeing as how Illinois was, of course, a state rather than a Territory, you can understand why other topics might be of interest), Lincoln moved it right back. Every time the crowd’s attention seemed to wane in the subject, Lincoln would say something certain to inflame his opponents in the crowd, drawing Douglas back into the fight. Lincoln’s position on this question may surprise you. He was adamantly opposed to popular sovereignty in the Territories, even when the majority opposed slavery (like Kansas). Lincoln’s position was not only anti-slavery, but also (and perhaps more importantly to Lincoln from a political game perspective) anti-states’ rights and local sovereignty.

Why? Lincoln’s question was not really directed at Douglas, the immediate audience. Nor was it really directed at the crowds of voters in the various Illinois towns where they debated. Nor was it really directed at the Illinois newspaper reporters who carried the debates across the entire state of Illinois. It was really directed at a national audience of Republican voters, because Lincoln knew that the Illinois Senate race in 1858 was just a warm-up for the Presidential election of 1860. If Douglas agreed with Lincoln on the Territorial sovereignty question, then he would lose the only issue where he was more popular than Lincoln within Illinois … Douglas would lose the Senate race and fatally damage his chances in the national Democratic primary. If Douglas disagreed with Lincoln, then he would probably win the Illinois Senate race and put himself in a reasonable position to win the national Democratic primary, but not without splitting his own party (Southern Democrats wanted slavery legalized in Territories even if the majority voted it down). Lincoln was playing a game four layers deep! He didn’t care about “winning” the debate. He didn’t care about winning the crowd. He didn’t really care about winning the Illinois Senate election. All of those things would be nice, but it was the fourth level – winning the national Republican primary and the national Presidential election of 1860 – where Lincoln was focused.

Lincoln’s multi-level game strategy worked perfectly. The Democratic party split into Northern and Southern factions (really into three factions if you count the Constitutional Union, which drew principally from former Southern Whigs), giving the Republicans a clean sweep of the Northern states and Electoral College domination even though Lincoln received less than 40% of the popular vote nation-wide. Douglas – the candidate of the (Northern) Democratic Party – finished second in the popular vote with 30% of the vote, but carried only one state (Missouri) and ended up with a mere 12 Electoral College votes, compared to Lincoln’s 180. Not bad for a former Congressman from a frontier state who couldn’t even win a Senate seat.

I’m always surprised when people who are quite aware of the linguistic game-playing that creates the fabric of politics are somehow blind to the same linguistic shaping of the fabric of economics and market behavior. I shouldn’t be surprised – as Upton Sinclair said, “it is difficult to get a man to understand something when his salary depends upon his not understanding it” – but still. We don’t expect our politics to be “scientific” or our politicians to be anything less than fallible humans, but somehow we expect Truth with a capital T when it comes to economics. There’s a tendency to treat economic communications and signals – whether it’s from a Famous CEO, a Famous Investor, a Famous Economist, a Famous TV Personality, or a Central Banker – as somehow less theatrical or less staged for a larger purpose than political speech. But this is a mistake. When Ben Bernanke said that the Fed would increasingly use its communications as a policy tool, he was declaring his intention to start playing a linguistic game. Or rather, his intention to play the game even harder than it had been played in the past. When Jean-Claude Juncker, former Luxembourg Prime Minister and head of the Eurogroup Council, said of European monetary policy “when it becomes serious you have to lie,” he was simply saying what every successful game-player knows: sometimes you have to bluff. Some Central Bankers are pretty good poker players (Draghi, for example); others … not so much. But they are all playing the Common Knowledge Game as hard as they can, they’re getting better at it, and they’re not going to stop. If you don’t understand the rules of this game, if you don’t listen to what is being said in the context of game-playing, then you are placed at a disadvantage versus those who do. You will not understand the WHY that exists behind the public statements.

There’s a slightly different linguistic game going on in the financial media, but no less important for understanding market outcomes. I’ll take CNBC as an example, but it’s just an example… you could make the same observations about any other media outlet. Within CNBC, Jim Cramer is everyone’s favorite whipping boy when it comes to complaints about media theatrics, but this is missing the forest for the trees. At least Cramer lets us in on the play-within-a-play conceit without constantly pretending that a daily price chart or a market “heat map” is anything other than a theatrical prop. If anything, Cramer’s performance is a paragon of honesty compared to the performances of the “news” hosts or the interchangeable “traders” on shows like “Fast Money.” XKCD published this cartoon in reference to ESPN and the like, but it’s even more applicable to CNBC and its ilk. Just to be clear, I’m not slamming these hosts and traders. I’m sure that they are overwhelmingly smart, honest people who believe that what they say are useful truths from their own perspectives. They are not hypocrites. But they are performers. And like any performer, there is a larger game being played with their words.

The larger meaning of the statements made on CNBC has absolutely nothing to do with specific investment advice or news. CNBC really could not care less about the actual content of what is being said. The purpose of CNBC’s game is not to tell you WHAT to think, but HOW to think, that thinking about investing in terms of some sell-side analyst’s anodyne story about fundamentals or some trader’s breathless story about open option interest is smart or wise or what all the cool kids are doing. Why? Because CNBC can create inexpensive content essentially at will to fill this demand, allowing them to sell advertisements and take cable carriage fees. Nothing evil or wrong about this. It’s what for-profit media companies DO. But the content they are producing is no less of a theatrical production than the State of the Union address, no less of a multi-level game, and it needs to be understood as such.

So what’s to be done if all of our leaders and all of our institutions are speaking past us, playing a larger game for power or money or whatever? Do we rage against the machine? Do we wander around like Diogenes, the founder of Cynic philosophy, holding to some absolutist standards of Honesty with a capital H and Truth with a capital T, living in rags and sleeping in a large clay jar?

If that’s the price of being a Cynic and constantly fighting the innate fallibility of Man and his works…no thanks. There has to be a middle ground between being a Cynic and a Fool, some way of playing the game without losing one’s soul. Recognizing that all of us human animals, including me and including you, are playing multiple multi-level games … well, that seems like a good start to me. The Truths in life are still death and taxes (and maybe compounding returns). Everything else is theatre, where honesty (with a small h) and truth (with a small t) are probably the best we can achieve. And that’s not so bad.

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Flakmeister's picture

The key is to figure out the difference between what is real and what is entertainment...

seek's picture

If it's on television, it's entertainment.

OC Sure's picture

The thing is to observe how markets react to the play. Then it can be more than entertainment.

Oracle of Kypseli's picture

It's what YOU do and how YOU behave not what others do and how they behave around you. You define who you are.

"If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,"

"If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,"

Excerpts from Kipling's "If"

Flakmeister's picture

Yeah, that pretty much sums it up...

But there is entertainment masquerading as substance everywhere...

I give you Michael Faber for one (but he wasn;t always that way...)

satoshi911's picture


I mead really the MSM looks like Einstein compared to the potty-talk here,

People keep saying "ZH used to be this or that", ... but as long as I can remember ZH has been 14 yearl old /sarc,

Yes, ... 14-45 year old teenagers living at home, is every marketers GOLD-RUSH I know ...

Uncle Remus's picture

We are living through a clusterfuck-treasury-looting-rape-and-pillage-a-palooza on a biblical scale and your panties are in a bunch over "potty-talk"? Seriously?

Mother Mary and Joseph.

Everyman's picture

Like, WOW, man, .... I see now,....


(passing the hash pipe)

Joe_in_Indiana's picture

I do not wear rags nor live in a clay jar, but I do ascribe to the Honesty and Truth Diogenes was looking for.  That is why my avatar is of Diogenes on Twitter.

Cacete de Ouro's picture

Darrell Cartrip comes to mind....and I like Darrell Cartrip, don't get me wrong....

Ban KKiller's picture

Pass the pipe. Add some hopium to it...

dexter_morgan's picture

Lincoln. Worst. President. Ever. Till. Now.

HelluvaEngineer's picture

Yes, but second best dictator!

Frozen IcQb's picture

Lincoln the worst? Really?

Based on treason, I would have given the rotten tomato award to FDR and Nixon.

dexter_morgan's picture

Yeah, but old dishonest Abe did it first

- US Constitution Article lll...Section 3. Treason against the United States, shall consist only in levying War against them. Lincoln waged war upon his own country. Unless one considers secession legal and the Confederacy was a sovereign nation.

Surging Chaos's picture

There would be no Barry had it not been for Lincoln setting the precedent of giving the POTUS de facto dictator-like powers. People wonder why the President can do things like pass all the executive orders he wants or declare war on his own terms, and it's because Lincoln was the enabler in all that.

Mainly I'm sick and tired of talk show hosts (Mark Levin and Glenn Beck, I'm looking at both of you) literally worshipping Lincoln and then try to say they're far small and limited government. -_-

Also, I'd say Wilson was a FAR worse president than Obama. The same guy that got us into WWI and signed the Federal Reserve Act. You know, the same Fed that we all love to hate. Signing the Federal Reserve Act alone cements Wilson's legacy as being infinitely worse than any other 20th or 21st century US president.

El Vaquero's picture

Give it time and Obama may get us into WWIII yet.  He's sure doing a good job of keeping bankers' cocks warm with his mouth, so that one is already covered. 

Flakmeister's picture

It doesn't help to have Larry Summers holding your head....

Oracle of Kypseli's picture

<<<<< Give it time and Obama may get us into WWIII yet. >>>>>

Give time and O'Bummer will take over as a real dictator just before next elections by manufacturing a state of emergency and martial law. He has already replaced most of the upper brass in the military.

Toolshed's picture

You guys are talking like you think Obungho is actually in charge or something. Pretty amusing actually. The president is a prop in today's world.

satoshi911's picture


Flakmeister's picture

Dexter, could you explain why? Be sure to compare his actions to those of another president under similar circumstances...

I'll presume you know that the state of the Nation on January 18 2009 defines the baseline...

You have the floor...

After that I may ask you to explain the "Cornerstone Speech"...

dexter_morgan's picture

Flakey, book upon book has been written about his many constitutional violations, leading ultimately to what we have today and in to the future. It would take hundreds of pages to detail his abuses, but heres a very short list for you.

- Secession of states was not prohibited by the US Constitution at that time. Therefore it was completely legal...
-  Lincoln ordered the military blockade of Southern ports. This an act of war. Only Congress can do that.
- Lincoln ordered hundreds of Northern newspapers who dared to speak out against him to be shut down. And their owners and editors were arrested for disloyalty. 1st Amendment of the Constitution that Lincoln swore to uphold? Didn't Obameo try to keep Fox News out of his press conferences?
-  Lincoln ordered the arrest of Ohio Congressman Clement Vallandigham for the crime of speaking out against him.
- Ex parte Merryman, Chief Justice of the US Roger Taney, sitting as a judge of the United States Circuit Court for the District of Maryland, ruled that Lincoln had violated the US Constitution when he illegally suspended the Writ of Habeas Corpus. After hearing this Lincoln signed an arrest warrant to have the Chief Justice of the US arrested.
- US Constitution Article lll...Section 3. Treason against the United States, shall consist only in levying War against them. Lincoln waged war upon his own country. Unless one considers secession legal and the Confederacy was a sovereign nation.
- Lincoln sent Union troops door to door in areas of Maryland, a Union state, to confiscate weapons. This is a clear violation of the 2nd Amendment of the Constitution.

The many Constitutional violations against Maryland:
Lincoln as already mentioned, trashed the Constitution by suspending the Writ of Habeas Corpus and sending troops door to door confiscating weapons in areas of Maryland.
Maryland was a Union state.
Lincoln ordered the arrest of thousands Marylanders for the crime of 'suspected Southern sympathies'.
Lincoln ordered the arrest of US Congressman Henry May representing Maryland.
Lincoln also had arrested...
Most of the Maryland State Legislature
Most of the Baltimore city council
The police commissioner of Baltimore
The mayor of Baltimore
Thousands of prominent Maryland citizens.
These people were arrested and held in Military prisons, without trial, some of them for years.
April 25 1861, When it looks as though Maryland may secede from the Union, Lincoln sends a letter to General Winfield Scott giving him permission to bombard Maryland's Cities.
This war criminal Lincoln couldn't wait to bombard innocent civilians. We call that Terrorism these days.
- Lincoln issues the Emancipation Proclamation.
This is a direct violation of the US Constitution and the US Supreme Courts decision on the matter.
- The Lincoln administration allowed the taking of private property for public use without just compensation or due process of law. This is a clear violation of the 5th Amendment. -A prime example is the Union army stealing Robert E Lees home, Arlington House, which they used as Headquarters.
-  The Lincoln Administration routinely used water torture against the thousands of Union prisoners arrested and jailed without trail. This violates the 8th Amendment, "Cruel and unusual punishment".
- Lincoln was Commander-in-Chief of an Army whose invasion of the South resulted in the deaths of 50,000 Southern civilians.

Sounds like your kind of guy actually.

I would ask also, if the Lincoln's intention all along was to free the slaves, why didn't he do that day one of his presidency intead of at a turning point in HIS war to get more troops?

Cornerstone Speech? HAHA Kinda like smilin Joe Biden spittin out stupid shit. All ya'all need is one o them double barrel shotguns to protect youselves.......

You have the floor - please explain point by point  how the Confederates States Constitution differed from the US constitution, and elaborate on why you think the US constitution is superior without referring to some extraneous extemporaneous speech nobody ever heard of.

Flakmeister's picture

War is hell, get over it...


I'll pass, bandying words with revisionist confederacy apologists is really not my thang...

But I will leave with a link to an excerpt of Stephans self-serving drivel here published in 1910:

His own words,no less...

BTW, the text of speech dates from 1886, Stephens had plenty of time to dispute the text...

Source: Henry Cleveland, Alexander H. Stephens, in Public and Private: With Letters and Speeches, Before, During, and Since the War (Philadelphia, 1886), pp. 717-729.

So I think that the speech which attempts to outline the differences between the Constitutions makes it pretty clear exactly what Secession and the war were all about... 

thatthingcanfly's picture

Flak, that's pathetic. "War is hell, get over it." So, "things happened," huh? That's your response?

Thanks a lot, Vladmir Lenin.

Tuck your tail between your legs and scamper off like a good dog.

Flakmeister's picture

When someone else fires the first shots, you know that you are playing for keeps...

Read Sun Tzu sometime....

Still can't get over the fact that your "Noble Cause" wasn't so noble?

Uncle Remus's picture

You must be the email guy in Knuk's link above.

Flakmeister's picture

I notice that not one of you peckerheads wants to dispute the Cornerstone speech...

It lays it out there for all to see exactly what was going on...

Flakmeister's picture

The new Constitution has put at rest forever all the agitating questions relating to our peculiar institutions—African slavery as it exists among us—the proper status of the negro in our form of civilization. This was the immediate cause of the late rupture and present revolution. Jefferson, in his forecast, had anticipated this, as the "rock upon which the old Union would split." He was right. What was conjecture with him, is now a realized fact. But whether he fully comprehended the great truth upon which that rock stood and stands, may be doubted. The prevailing ideas entertained by him and most of the leading statesmen at the time of the formation of the old Constitution were, that the enslavement of the African was in violation of the laws of nature; that it was wrong in principle, socially, morally and politically. It was an evil they knew not well how to deal with; but the general opinion of the men of that day was, that, somehow or other, in the order of Providence, the institution would be evanescent and pass away... Those ideas, however, were fundamentally wrong. They rested upon the assumption of the equality of races. This was an error. It was a sandy foundation, and the idea of a Government built upon it—when the "storm came and the wind blew, it fell."

Our new Government is founded upon exactly the opposite ideas; its foundations are laid, its cornerstone rests, upon the great truth that the negro is not equal to the white man; that slavery, subordination to the superior race, is his natural and moral condition.

LoneStarHog's picture

There's a reason why CNBC is not aired at a Holiday Inn Express.

TideFighter's picture

Abe had "Honest" in front of his name, O' has "That Muthafucka" 

BobRocket's picture

TideFighter : coffee+nose


The XKCD cartoon is at

If you hover over the picture there is a callout.



thatthingcanfly's picture

The moniker "Honest Abe" was coined by Lincoln's political satirists. It was sarcasm. They were commenting on his prolific lying.

Cognitive Dissonance's picture

Politics......the manufactured drama of state to distract the slaves of Empire.

onelight's picture

Eyeballs for advertisers, writ smaller and larger..

Muppet's picture

Cognitive... excellent succinct comment.  Wisdom, let us attend.

Dollar Bill Hiccup's picture

A fool believes what he is told.

A sceptic casts a critical eye and takes some distance, watching to see what unfolds.

A cynic recognizes the lie, and then wears it proudly as his own coat.

The fool and the cynic are both doomed, each in their own way.

Goldilocks's picture

Wide Mouth Mason- My Old Self (3:48)

Wide Mouth Mason - Sugarcane (4:26)

Wide Mouth Mason - Midnight Rain (3:48)

AldoHux_IV's picture

Words of a retard; perpetuating the theater of the absurd b/c it's living by truth with a capital T entails poverty as the system stands today does not denote by living by it today and tomorrow we change the value proposition, but that's too hard of work to those who you aptly quote as being paid not to understand.

LOL, game theory you boys at epsilon theory sure love theory & have a huge problem w/reality.

NOTaREALmerican's picture

Re: w/reality

Reality is overrated when dealing with humans. 

Better to manipulate the dumbasses with bullshit and create reality for them.    That's how humans compete, with bullshit.

Uncle Remus's picture

Regular or Wintergreen?

What? Oh. Nevermind.