Tuesday , December 11 2018
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Pics or It Didn’t Happen

Summary:
Lots of good comments on this week’s ET Brief, “Burn. It. Down.“, and it reinforces my belief that the Epsilon Theory commentariat is the best thing happening on the internet today. Seriously. Here’s the core question on the site: What does it take to burn down the system that protects oligarchs like Jeffrey Epstein and the two guys pictured above? I was thinking about that question when I heard the Kareem Hunt news on my sports radio station yesterday afternoon. For ET readers not immersed in all things football-related, Kareem Hunt is the star running back for the NFL’s Kansas City Chiefs, an offensive juggernaut of a team picked by many as the favorite to win the Super Bowl this year. This past summer, the team announced that Hunt had been involved in a hotel

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Pics or It Didn’t Happen

Lots of good comments on this week’s ET Brief, “Burn. It. Down.“, and it reinforces my belief that the Epsilon Theory commentariat is the best thing happening on the internet today. Seriously.

Here’s the core question on the site:

What does it take to burn down the system that protects oligarchs like Jeffrey Epstein and the two guys pictured above?

I was thinking about that question when I heard the Kareem Hunt news on my sports radio station yesterday afternoon. For ET readers not immersed in all things football-related, Kareem Hunt is the star running back for the NFL’s Kansas City Chiefs, an offensive juggernaut of a team picked by many as the favorite to win the Super Bowl this year. This past summer, the team announced that Hunt had been involved in a hotel “altercation” back in February, but that both “law enforcement” and the NFL had “investigated” the incident, that no charges had been filed, and that Hunt had “learned a valuable lesson”. All good!

But yesterday, TMZ released a hotel security video they had obtained, showing Hunt knocking down and then kicking a woman. And when I say kicking … it’s not a tap. It’s a brutal attack. Later that afternoon, the Kansas City Chiefs said that the video showed that Hunt “had not been truthful” with the team in his description of the “incident”, and that the team was firing him immediately. No good!

For TMZ or NFL fans, all of this was a carbon copy of the Ray Rice “incident” from 2014, where an initial NFL investigation gave the Baltimore Ravens running back a slap on the wrist for beating up his fiancee in an Atlantic City hotel. After a security video of the attack was released, however, showing Rice dragging the unconscious woman from an elevator, the team immediately fired Rice.

Now the NFL, one of the richest and most powerful and security-savviest collection of oligarchs on the face of the earth, claims that they never saw either of these videos as part of their official investigation. If true, the only possible reason is that they DID NOT WANT TO SEE the videos. The only possible reason is that they REFUSED TO SEE the videos as part of their “investigation”.

Were charges filed? Did the police write up a report? No and no, you say? Well, then, nothing to see here! Let’s move along, please! Let’s sit down with Rice and Hunt and make sure that they have “learned their lesson” and go play some football!

Pics or It Didn’t Happen
NFL Commissioner Goodell

The videos changed everything.

The video was the catalyst for the creation of common knowledge regarding Kareem Hunt and Ray Rice – where now everyone knows that everyone knows that Hunt and Rice attacked women – and it is ONLY that common knowledge that changed the NFL’s behavior.

This is the Common Knowledge Game, and it’s the most powerful engine for crowd behavior in any social system.

It’s not enough for lots of people in and around the NFL to know perfectly well that Hunt and Rice physically assaulted women. It wasn’t a secret. But that’s not enough.

Just like it wasn’t enough for lots of people in and around Hollywood to know perfectly well that Harvey Weinstein sexually assaulted women. It wasn’t a secret. But that’s not enough.

Pics or It Didn’t Happen

Just like it’s not enough for lots of people in and around Washington and New York and West Palm Beach to know perfectly well that Jeffrey Epstein and his oligarch friends sexually assaulted women. It’s NOT a secret.

But that’s not enough.

NFL behavior did not change until common knowledge was created, until everyone knew that everyone knew that Kareem Hunt and Ray Rice beat up women. Hollywood behavior did not change until common knowledge was created, until everyone knew that everyone knew that Harvey Weinstein raped women. American electorate behavior WILL not change until common knowledge is created, until everyone knows that everyone knows that there is a ruling class of wealth and statist influence that runs roughshod over our most basic human rights.

How is common knowledge created?

First, you need a Missionary – a person or organization with enough celebrity or broadcasting power so that everyone thinks that everyone else has heard the message. This is why celebrity is the most valuable currency in the world today. In a mass society driven by the Common Knowledge Game, the ability to control your own cartoon is THE secret to political and economic power.

Second, you need that message to possess informational power – the ability to change prior beliefs, typically through what we generically call “credibility”. Does the message ring true? If not, is there some appeal to technology or impartiality that can be made? To be clear, informational power has nothing to do with truth. Informational power is simply the degree to which information changes our minds from what we believed before.

Put these together – a powerful (famous) Missionary and a powerful (credible) message – and you create common knowledge, something that everyone thinks that everyone thinks. For Harvey Weinstein, the Missionary was Rose McGowan and the credibility was derived from her “statements against interest”, to use a legal term. McGowan was getting nothing but pain and risk from what she did. That’s credible. For Kareem Hunt and Ray Rice, the Missionary was TMZ, a for-profit muckraker with little inherent credibility. Here, though, the credibility is derived from the perception that security videos are “hard evidence” and are unimpeachable.

In both cases – and this is going to be important, so bear with me – the prior beliefs of everyone regarding Weinstein, Hunt and Rice were lightly held. In other words, it didn’t take an enormously powerful Missionary and an enormously credible message to make everyone think that everyone thinks that Weinstein, Hunt and Rice are monsters.

Our prior beliefs about oligarchs like Trump and Clinton are not lightly held. They are very strongly held. Maybe you love one and hate the other. Maybe you hate them both. But you don’t NOT have a strong opinion.

What that means is that the haters of, say, Trump won’t need a particularly credible message to keep hating. But the lovers will. And the haters know that. When we say that common knowledge exists when everyone thinks that everyone thinks something, that everyone includes lovers and haters. Common knowledge on Trump is what everyone (lovers and haters) think that everyone (lovers and haters) thinks about Trump. And that ain’t much.

There is very little common knowledge about Trump because the haters know that only the most unimpeachable message will change the lovers’ minds. And the lovers know that only the most unimpeachable message will change the haters’ minds. 

Unimpeachable messages are hard to come by these days. Email? Maybe. Video and photographs? Yes.

Pics or it didn’t happen.

And that’s why the “unimpeachableness” of in-the-wild photographic or video evidence must be destroyed.

My prediction – the word “doctored” will be the 2019 Word of the Year, as every mainstream media outlet, from WaPo to the WSJ,  highlights the “dangers” of faked videos and photos, mostly constructed by those subversive Rooskies or their stooges, I’d imagine.

This isn’t a Left thing and this isn’t a Right thing. This isn’t a Trump thing. It’s a Power thing. It’s an Oligarch thing. You think Bezos or Bloomberg or Zuck or Benioff or any of the umpteen media-savvy billionaires running around today wants some stray security video that’s embarrassing to themselves or their family or their company to “accidentally” make its way into the wild? You think any sitting governor or senator or president wants that? You think Palantir or the NSA wants that? Pfft.

Is there a danger from faked videos? Yes, there is a clear incentive for partisan crazies and foreign mischief makers to fake videos and photos in hopes of creating useful common knowledge for their cause. What I call Counterfeit News.

But there is an even greater incentive for the Nudging State and the Nudging Oligarchy to discredit ALL non-state sanctioned video and photographic messages. Because this is the source of common knowledge risk for the entire system.

What can we do? 

I think there’s a distributed ledger technology (DLT) solution that can be applied here. I think it’s part and parcel of Taking Back Our Data.

I think we’re just getting started in finding new stories for crypto, stories that aren’t based on Price, but on Liberty and Justice For All.


About Ben Hunt
Ben Hunt
He is the chief investment strategist at Salient, a $14 billion asset manager based in Houston and San Francisco, and the author of Epsilon Theory, a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators read Epsilon Theory for its fresh perspective into market dynamics.

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