The problem of what to do with Martha Stewart is beginning to assume grotesque proportions, somewhere between an incompetently staged melodrama and one of those scenes in a Jerry Springer show where families behave like baboons.

If Martha had been roasting on a spit since she unwisely dumped 4,000 shares of ImClone Systems last December, she couldn’t have endured a more cruel and unusual punishment. And all that for a crime like insider trading that is ultimately provable only by getting inside her head to discover what it was that provoked her to make a stock trade involving a drug called Erbitux that may or may not cure colorectal cancer.

If only Martha hadn’t been everybody’s idea of a smug perfectionist trading on the name of a former husband with a typically white Anglo-Saxon Protestant name, lording it over her WASPy Connecticut neighbors who may have been just as Polish as she is. I confess to utter disgust that Martha, a former professional stock broker herself, didn’t better appreciate the insider trading laws so she could understand why so many cynical people assume she violated them. The screaming irony is that for all the money she saved by dumping her ImClone shares in advance of the sudden collapse in their value, she could have afforded to hire more lawyers than God to tell her it looked smelly.

Meanwhile, there is a growing market for Martha disparagements. These include Internet-traded T-shirts that read “Insider trading: That’s not a good thing.”

More importantly, there’s a rumor rampant on Wall Street that Martha wants to get out of being Martha Stewart. This takes the form of reports that she will retire as chief executive and chairman of the board. If Martha is a sinking ship, what shrewder strategy than to pretend she’s no longer in command?

There are problems with this sort of thinking. Obviously, even as she has become an increasing liability to Martha Stewart Living Omnimedia, she also remains a very real human being. Separating her from her brand name could require a crowbar, maybe even a team of mules.

Martha’s main problem is that she has assumed such a thoroughly defensive position. Nasty people will logically assume she has something to hide. She even canceled appearances on CBS’ “Early Show,” a lightweight format of fluff and prattle where her skilled handlers might have babbled on endlessly about her innocence in between the cabbage recipes and schemes to stencil her ceilings in bright orange Amish patterns.

Martha has yet to agree to appear before congressional committees, whose members are drooling to be the first to ask her a searching question or, failing that, be able to brag that they’ve been on TV with Martha Stewart. This tries the patience of Congress, which knows that the first hearings at which Martha appears will have ratings approaching the stratosphere. Pressure for her to appear can only intensify as members of Congress lust to be associated with her star power.

Martha’s miseries are multiplied by the fact that her principal retail outlet, Kmart, is in bankruptcy, her legal expenses are mounting, and the price of a share of Martha Stewart Living Omnimedia is suffering. The battering she and her company are taking would daunt the most skillful managers even without the carcass of Kmart to deal with. Her Merrill Lynch stockbroker, Peter Bacanovic, is under suspension, as is his assistant, Douglas Faneuil. Both are crucial to support for her position that her ImClone trades were innocent acts prompted by nothing more sinister than a longstanding “sell” order.

The only piece of recent good news for Martha is that her shares leaped for a time last week when newspapers reported she might step down as CEO. But that was precisely the sort of good news Martha can do without, since it implies that she has become a drag the company would be better off without.

Obviously, Martha has made a judgment that the less she says, the better. But for a woman so used to giving advice and yakking her head off about appearances and how they matter so desperately, she is, for once, unconvincing.