This article re-imagines the textual relationship between Carl Schmitt and Walter Benjamin as one of much greater affinity than has typically been granted to it. This reworking of their textual relationship draws largely from a study of how and in what ways the figure of the sovereign in Walter Benjamin‟s study of the German Trauerspiel can be read as a response to Carl Schmitt‟s theory of sovereignty as found in Political Theology. Though the article‟s narrative trajectory covers a textual relationship, the larger stakes of the work here involve the description of the structure of the state of exception (in particular in its legal, political, and philosophical valences) and its uses and abuses as a tool of sovereign authority, both historically and in contemporary forms. The paper argues that a) functionally and historically a great deal of the truth of the paradoxically riddled structure of sovereign authority can be found in its opposite, namely, the inability to decide on the exception; and b) typologically the sovereign suffers from the tension inherent in a diametrically opposed dual-identity; c) the article also explores from a psychoanalytic perspective the potential space for politics in a world in which law and life have been grafted together in a permanent state of exception.