A NYT report on the economic policy thinking inside the White House right now is easily one of the most devastating things you'll have read about Obama in a long time.

Just the title, White House Debates Fight on The Economy, as if maybe perhaps the sorry economy is something worth getting into a fight over, is sad.

But it gets worse.

His top economic advisor, Gene Sperling, is pushing for him to pursue things like tax breaks for corporations that hire.

Snooze.

On the other hand, his political folks like David Plouffe and Bill Daley want him to pursue pragmatic, passable policies like free trade deals and better protections for patent-holders. Supposedly the premise is that these issues appeal to independent voters. This can't possibly be real. If there's an independent, undecided voter out there who will tip towards Obama because he gets a free trade deal with Korea passed in the next year, please show him to us.

Then there's this:

Mr. Plouffe and Mr. Daley share the view that a focus on deficit reduction is an economic and political imperative, according to people who have spoken with them. Voters believe that paying down the debt will help the economy, and the White House agrees, although it wants to avoid cutting too much spending while the economy remains weak.

So basically, they want Obama to be more Republican, as if a voter, whose chief concern about the deficit is ever going to vote for Obama.

Before this story came out, Cullen Roche recently summed up the white flag-thinking on the part of The White House. Specifically, this is in regards to the idea that Obama can't/couldn't pursue a continuation of the payroll tax cut, when it expires in a few months, because the GOP will block it:

The Republicans do not want to help Obama and they appear intent on enacting a game plan similar to what I described as their playbook for winning in 2012. But the fact that they’ve come out and rejected the tax cut in advance means nothing. For instance, President Obama made it pretty clear that he was going to reject any debt ceiling agreement that involved a balanced budget agreement last week. But you didn’t see John Boehner roll over like a dog and take his ball and go home. No, he turned into a bull dog and ultimately, the Republicans ended up getting something for nothing. THAT’S POLITICS. It’s called tough negotiating.

Perhaps the most worrisome part is that there doesn't seem to be anyone at The White House who really grasps the magnitude of the economic problem (and by that, we're mostly talking about joblessness) who also has a clear idea how to address it.

Again, a big solution isn't passable right now, but status quo white flag-ism will be both a disaster for the country and Obama's re-election strategy.

On a related topic, see why S&P's downgrade of the US is already proving to be a disaster >