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The latest reports from Europe indicate that the continent is slipping back into recession. The U.S. is doing only slightly better, with positive economic growth but scant progress on the jobs front, and no growth in the earnings of the vast majority of Americans.

Meanwhile, global climate change continues to worsen, producing unprecedented policy conundrums of how to reconcile the very survival of the planet with improved living standards for the world's impoverished billions, and for most Americans, whose real incomes have declined since the year 2000.

Amid all of these serious challenges, what common strategies are top U.S. and European leaders pursuing? Why, a new trade and investment deal modeled on NAFTA, to make it harder for governments to regulate capitalism.

The proposed deal, known as T-TIP (for Trans-Atlantic Trade and Investment Partnership) would define well-established domestic policies as illegitimate restraints of "trade," including protections of workers, the environment, public health, and regulation of finance.

T-TIP reverts to the pre-Depression assumption that laissez-faire is the norm and any attempt to tame market forces is illegitimate. You would expect the far right to propose this sort of end-run around national democracy, but center-left governments of Europe and North America are actively promoting T-TIP. That speaks volumes about who sets policy agendas.

These deals began in the early 1990s with NAFTA and its more recent spawn (supported by both the Bush and Clinton administrations), and also include a proposed Pacific trade and investment deal known as the Trans-Pacific Partnership.

Even the backers of this proposed deal are not claiming it is any kind of solution to the economic stagnation gripping both sides of the Atlantic.

The studies of its possible effects point to a wide range of possibilities, including significant job losses. None predicts more than trivial economic gains.

The Obama administration and European supporters of T-TIP had hoped to get a deal by this summer. But plainly, that's not happening.

In the U.S., the White House has been unable to get Congress to approve negotiating authority, known as fast track. In Europe, opposition is mounting as national governments, already chafing under the usurpation of their authority by officials in Brussels, grasp that T-TIP would be one more assault on their economic sovereignty.

National governments face retribution from voters when the economy turns sour, but T-TIP would deprive them of many of the economic stabilization tools that remain.

Even in Germany, Europe's champion exporter and a traditional supporter of what economists call liberal trade, there is a growing backlash. Germany's powerful association of small and middle-sized enterprises, representing 270,000 firms and nine million workers, issued a statement last month opposing the agreement in its present form.

The Social Democratic party, junior partner in the governing coalition to Chancellor Angela Merkel's Christian Democrats, flatly opposes the extra-legal tribunals to which investor disputes are supposed to be referred under the deal. Greens all over Europe have raised alarms about the impact on environmental protections, as have their U.S. counterparts.

The best thing one can report about T-TIP is that it could soon collapse of its own weight. That said, it is bizarre that at a time of serious economic stagnation this is the best our leaders can do.

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If U.S. and European leaders were serious about addressing the common economic malaise, the Europeans would begin by moving away from the austerity policies that have been inflicted on the continent as a thoroughly perverse remedy to the aftermath of the financial collapse of 2008. And the Obama administration, instead of embracing deficit reduction, would propose serious public investment in infrastructure and green transition, both for its own sake and to produce economic stimulus and jobs.

What explains both the embrace of T-TIP and the lack of robust recovery policies is the persistence of corporate and banker influence on public policy in both Europe and America. Who supports austerity? Wall Street and its European counterparts. Who supports using trade to undermine regulation of capitalism? Wall Street and its corporate allies.

While Europeans and Americans alike have been alarmed by the rise of the far right, the dominance of the corporate right is the bigger menace.

Not only do these corporate policies prevent nominally center-left governments from addressing real economic ills-but their failure to do so then nourishes far-right reaction.

T-TIP is worse than a distraction. It's another manifestation of corporate capture of democratic government. As soon as T-TIP is given a decent burial, perhaps we can get on with the business of rebuilding an economy that serves people.