This paper explores the possibilities for critical policy analysis afforded by Lacanian discourse theory, with its emphasis on the unconscious and the agency of the letter, and considers its significance for critical policy analysis in education, in ways that complement and supplement the insights of post-structuralist discourse theory. To explore these possibilities, the paper examines the fantasies residing in neoliberal education policy's vision of the knowledge economy, before focusing on a Lacanian analysis of the ideologies of knowledge and power manifested in the US KIPP (Knowledge is Power) charter school network, in order to think about how neoliberalism's obsession with knowledge as control and mastery might be unsettled by what Lacan called "the sublimity of stupidity"--by engagement with a psychoanalytic epistemology that recognizes how conscious knowledge may be interrupted by the unknowing of the unconscious and that places neoliberal regimes of knowledge in a dialectical relationship with non-knowledge, ignorance, stupidity and desire.