Are we meant to laugh or cry at the levels of narcissism on display in “Blue Jasmine”? Both, I think. Woody Allen’s triumphant dramatic comedy is an unsparing portrait of a One Percenter in free fall. It’s always extra-funny to see a person in top hat or tiara skid on a banana peel, yet Cate Blanchett hits the pavement so painfully that the guffaw catches in your throat.

Jasmine, formerly married to Hal (Alec Baldwin), a rich financial fraudster, shopped till his Ponzi schemes dropped. Beautiful, poised and bereft of any marketable skills, she is evicted from her Park Avenue penthouse and reduced to couch-surfing the cramped San Francisco walk-up of her grocery-clerk sister, Ginger (Sally Hawkins). It sounds like the setup for a laugh-track sitcom, but Allen constructs his characters with intricate care and dissects their class clash with scalpel-sharp intelligence. Blanchett makes Jasmine self-deluded, deplorable, dreamy and train-wreck mesmerizing, delivering the best film work of her dazzling career. It’s like a Diane Arbus comedy routine.

Shooting his recent films in London, Paris, Barcelona and Rome seems to have revived Allen. Here he’s almost painfully sharp. He uses his San Francisco locations satirically, emphasizing the chasm between Marin County mega-wealth and the bedraggled working-class neighborhoods south of the Financial District. Treating Jasmine to lunch at a Fisherman’s Wharf bar and grill, Ginger squawks, “Isn’t it European?” Allen’s camera holds for just a beat on a grimy container ship docked at the next pier.

Jasmine (nee Jeanette) and Ginger are adopted sisters, we learn, and there’s no other way the princess and the serving girl could have had a relationship. The tall, haughty blonde Blanchett and petite, perky brunette Hawkins are like a heron and a sandpiper. Jasmine deals with the indignity of having to work for income by gulping Xanax with vodka.

“Who do I have to sleep with around here to get a Stoli martini?” she barks at one point, telling us a lot about her sense of how things work. It’s not surprising, given her self-medication, that she lapses into reveries about her lost life, enabling Allen to cut back to scenes of those not-entirely golden days. In addition to being a swindler, Hal was a cad with a yen for youngsters, and here Allen unpacks autobiographical material from his scandal-stained past.

Ginger lives in the moment, eternally open and chipper. Her new boyfriend, roughneck car mechanic Chili (Bobby Cannavale), was planning to move in before Jasmine appeared on Ginger’s doorstep. His hostility toward Jasmine is partly fueled by self-interest, partly by resentment of her patrician airs, and partly by an honest desire to protect Ginger. Jasmine drives a wedge between the pair, judging Chili not “a man of substance,” and setting Ginger in search of a gent with more potential, a quest less liberating than it sounds.

Still an attractive woman (when she’s not in full Stoli meltdown) Jasmine’s prospects seem to brighten with the arrival of a politically ambitious diplomat (Peter Sarsgaard) in need of a woman with impeccable social skills. Other passengers on the film’s relationship merry-go-round include Michael Stuhlbarg as a schlubby dentist, Andrew Dice Clay as Ginger’s surprisingly soulful ex, and Louis C.K. as a sound engineer who is either carefree and amorous or sexually compulsive. All the characters share a common failing, the inability to face inconvenient facts. Lives constructed on pretense can only stand for so long. Watching them collapse is appalling but undeniably entertaining.