The Knicks’ seemingly limitless capacity to embarrass themselves stretched its boundaries once again this week, as damaging testimony in a sexual harassment trial further sullied the team’s already degraded reputation.

New York owner James Dolan and team president Isiah Thomas have spent the week in a Manhattan courthouse seeking vindication from accusations levied by a former Knicks marketing executive Anucha Browne Sanders. But it’s clear all they’re really doing is further disgracing the name of a once-proud franchise that has become a laughingstock.

Browne Sanders is suing for nearly $10 million in damages because of Thomas’s alleged sexual harassment and the team’s alleged retaliatory firing when she tried to press her case. Her charges were presented more than a year ago but the case didn’t go to trial until this week.

I’m not qualified to tell you whether she’ll succeed or not. However, at this point, it hardly matters whether the jury finds Thomas and/or the Knicks guilty. What the club seems to have forgotten is that this case is simultaneously being tried in the court of public opinion, and in that forum the club is enduring daily savage beatings.

Let’s start with the team’s fans, who I’m sure were thrilled to hear Browne Sanders’s accusation that Thomas said “B—, I don’t give a f— about those white people” in reference to the team’s season-ticket holders. Come to think of it, I can’t imagine David Lee was too pleased either.

If I were a Knicks ticket holder, I might ask Thomas why I should give a f— about his team, given that they haven’t had a winning season since he took over. And I’d certainly think twice about forking over thousands of dollars if the team considers its customers such a nuisance. That accusation alone may cost the team more money than anything they pay out to Browne Sanders.

Other myriad embarrassments have cropped up during the course of the trial. On Monday, we had Thomas’s tortured explanation (given in a December, 2006 deposition) of why a white man calling a black woman “b—” was more offensive than if a black man did.

That same day, New Yorkers were treated to testimony about a team intern having sex in a car with Knicks guard Stephon Marbury, and another incident when Marbury called Browne Sanders the b-word. Sadly, there was no report on whether this offended Thomas.

And so it goes on, with more embarrassing testimony likely coming in the next few days. But while Thomas’s actions have been the main focus to this point, they belie the real protagonist here — Knicks owner James Dolan.

He is the one who decided to take this case to trial rather than settle it and make it go away, which is what the league’s other 29 owners almost certainly would have done in this situation. And he is the one who is basically forcing Thomas to take the stand and allow the allegations against him to see the light of day — further diminishing the already minuscule odds of his being hired by another team once he’s finally dismissed from New York.

There’s a small part of me that finds this oddly touching. Dolan is basically saying the public embarrassment and possible financial loss is worth it to him in order to clear his good name, and if he’s telling the truth you have to respect that.

On the other hand, this case shows off the greatest weakness of the management at Madison Square Garden more than any basketball decision. In terms of pride, both Dolan and Thomas are off the charts, with the result that each can be incredibly stubborn to re-evaluate decisions that are clearly amiss.

In retrospect, the trial allows us to see the Knicks’ basketball decisions in a new light. Dolan’s decision to extend Thomas’s contract last season was the most obvious example, as the owner was basically telling everyone, “I did NOT make the wrong decision in hiring this man, even if at the moment every shred of evidence points to the opposite conclusion.”

Thomas has shown the same stubborn, prideful streak, even admitting it at times: “I’m very stubborn about the path we are taking,” he told the Daily News last season. Hopefully that path includes a 180-degree turn at some point, but his words convey the impression of a guy who is completely lost on a back road and steadfastly refuses to stop for directions.

In addition to his rosily optimistic comments to the press regardless of where the Knicks are in the standings, or the constant excuses about injuries, more specific examples abound. For starters, there was last year’s curious decision to continue starting Channing Frye and bringing David Lee off the bench — as though, because Thomas had drafted Frye ahead of Lee, it couldn’t be possible that Lee was the better player.

Along similar lines, Jared Jeffries’s continued presence in the starting lineup seemed to owe more to the $30 million contract Thomas gave him than anything he was doing on the court. And how about the 10-game midseason stretch where Jerome James appeared as a starter last season? If that wasn’t a bent-over-backwards attempt to justify a colossal waste of $30 million, what was it?

Of course, the tone in every organization is set at the top, and Thomas’s stance is just a reflection of the owner’s. More evidence of Dolan’s stubborn pride — and sensitivity — can be seen in how the team deals with the press.

The Knicks have become the North Korea of the NBA in this respect — nothing remotely critical of the organization is tolerated, even the type of nonspecific laments that are normally de rigueur for coaches after a loss. Instead the team has adopted a bunker mentality in which no player or coach may gave an interview without a PR staffer present to record it and a permission slip from his mother.

So as the trial circus keeps rolling this week, let’s be clear about what we’re really seeing. While the trial focuses mostly on Thomas, the fact that there’s a trial at all is solely because of Dolan. And, in his mind, this trial is solely about Dolan.

That’s the real story here, so as long as he remains at the top I’m not sure it matters whom the Knicks have in Thomas’s role. While Zeke’s reign has been disastrous on multiple levels, it’s hard to imagine any organization succeeding with such a myopic owner calling the shots. The Browne Sanders trial may have nothing to do with basketball, but it has everything to do with why the Knicks have been such a failure for the past half decade.

jhollinger@nysun.com