The economy faces a persistent budget crisis.
Pushback from Wall Street has gutted most of the banking reforms, unemployment is stuck around 8 percent, corporate profits have been soaring while there is no wage growth -- and the newest White House proposal is... a free trade zone with Europe.
This idea of a Trans-Atlantic Free Trade Area was tossed in, reportedly at the last moment, to President Obama's State of the Union, and is being promoted in the government's latest report on trade.
You don't know whether to laugh or cry. This is a classic case of changing the subject to a cause that will not address any of the economy's deeper ills and could well worsen them.
It recalls the very old joke about the drunk looking for his keys under a lamp post. He mentions to a cop that he lost the keys somewhere else, but "this is where the light is."
Bipartisanship is not doing so well this season, but the one thing that Republicans and Wall Street oriented Democrats can agree on is more free trade deals.
The fact is that there is already massive trade between the U.S. and Europe -- about $650 billion last year, an increase of two-thirds just since the turn of the 21st century. Tariffs are already at very low levels.
The remaining issues dividing the U.S. and the EU are ones where no agreements are in sight. The Europeans, for instance, have much higher standards to protect their consumers from Franken-foods, and are not about to give them up.
Since the creation of the World Trade Organization in 1995, free trade deals have been less about facilitating trade and more about undermining social and economic protections and wages. These trade deals create a regulatory race to the bottom, on health, labor, environmental, and financial standards. The proposed deal would also weaken or ban efforts to use government contracting powers to promote green development and other domestic jobs and infrastructure efforts that rely on "Buy American" provisions.
Every time another trade deal is proposed, spuriously precise claims are made about its benefits. A U.S.-EU trade deal, according to one study, would increase U.S. gross domestic product by 0.99 percent or more, other things being equal.
But other things are not equal. The same ideology that promotes these trade deals promotes economic and financial deregulation. Prudent regulations are dismantled as barriers to trade. How do we weigh a possible one-point gain in GDP against the trillions of dollars of losses that resulted from the financial collapse?
More free trade deals don't compensate for other economic imbalances. As Public Citizen's irreplaceable Lori Wallach recently reported, in 2012 the (non-oil) trade deficit rose to a five-year high.
We keep incurring trade deficits because we no longer make enough stuff that the rest of the world wants to buy, and the fruits of our past trade policies make it too easy for American industry to expand offshore.
Trade deals are also anti-democratic, both in their substance and in how they are negotiated and ratified. Corporate lobbyists are given access to negotiating documents while public interest groups get none except via leaks. Then the deal is approved by Congress under a "fast track" up-or-down vote that allows no amendments. Fast track expired in 2007, and was not renewed, but the Administration now wants it reinstated under the euphemism, "Trade Promotion Authority."
Though President Obama and Speaker Boehner have been at each other's throats on budget issues, we can expect the two to stand shoulder in supporting this deal (why do we get bipartisanship only when it serves corporate interests?)
The idea of a trans-Atlantic trade deal has been on the shelf for decades. The president should put it back on the shelf and deal with the real problems afflicting our economy.
Robert Kuttner is co-editor of The American Prospect and a senior Fellow at Demos.
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