How Does the U.S. Solve a Problem like North Korea?

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A South Korean marine howitzer fires during a military exercise in Baengnyeong Island, near the disputed border between the two Koreas, on Aug. 6, 2010

From Pearl Harbor to the Gulf of Tonkin, the Pacific has a history of naval incidents that have drawn the U.S. into war. That's why the crackling tensions that have followed the sinking of the South Korean naval vessel Cheonan in the Yellow Sea last March have many observers worried. North Korean leader Kim Jong Il, whose isolated regime has been blamed for sinking the corvette and killing 46 South Korean sailors, is ailing, and concerns over his succession — and the desperate social conditions in which he keeps his people — create a dangerous tinderbox.

"The North Koreans are fully capable of stepping over the line and creating a crisis," says Tom Schieffer, who juggled Pyongyang's provocations as U.S. ambassador to Japan from 2005 to 2009. "That is where the danger of miscalculation can occur and things can get pretty serious pretty quickly."

The challenge is halting North Korea's belligerent actions without triggering war, and without South Korea or the U.S. paying a price — either in dollars or diplomacy — for Pyongyang's good behavior. "North Korea has followed the Mafia model: 'If you don't give me some money, I'll throw a brick through your window,'" Schieffer says. "I don't think they're going to get any money, but the key question is: Do the North Koreans know that?"

The March 26 sinking of the Cheonan has triggered a series of tit for tat between both Koreas. On Monday, North Korea fired about 110 artillery rounds near its disputed western sea border with South Korea, which came shortly after Seoul ended five days of naval drills in response to the corvette's sinking. On the other side of the peninsula, on Sunday, North Korea seized a 41-ton South Korean squid boat and its crew of seven, including three Chinese, for allegedly trespassing into the North's territorial waters. Last month, South Korea and the U.S. held naval exercises off that same eastern coast of the Korean peninsula; and Seoul is also weighing resuming propaganda broadcasts and leaflet drops into the north, which will antagonize Pyongyang.

"It's unclear to us exactly what North Korea feels it is trying to achieve through this ongoing chest-thumping," State Department spokesman P.J. Crowley said on Monday. "There will be no reward for North Korea for these provocations." North Korea has denied it torpedoed the South Korean vessel and has declared that any retaliation would lead to war. Last month, the U.N. Security Council condemned the sinking without naming the perpetrator.

U.S. experts are split over how to handle the rising tensions. Michael O'Hanlon, a defense expert at the Brookings Institution, believes a "firm but finite" response — seeking millions of dollars in reparations for the Cheonan deaths — is the best route. It complies with international law, and would hurt the North Koreans so long as there was an agreement with China not to boost payments to cover the reparations' cost. "We'd tell them this is the way you deal with cold-blooded murder," O'Hanlon says, "when a state is not willing to make amends itself."

But retired Army General B.B. Bell, who commanded U.S. forces in South Korea from 2006 to 2008, believes tougher action by the South Koreans is required. "Until North Korea is punished for its frequent and continuing military strikes," he says, "they'll continue to do them without concern for what the consequences might be." Following the Cheonan sinking, Bell says Seoul should have attacked Pyongyang's sub bases and key command sites.

Because the North Korean regime is most concerned with its own survival, it would not launch all-out war in response to such an attack. It justifiably fears the U.S. and South Korean militaries would remove the regime in the resulting wider conflict. "I am convinced that a measured military response by the South Koreans would not lead to a general war," Bell says.

While serious, the skirmishes between North and South Korea can also be seen as shadowboxing by their respective protectors, China and the U.S. Although China remains a bogeyman in some corners of the Pentagon, the shifting relationship between the two nations suggests economics would govern any clash between the two. Major General Luo Yuan, deputy secretary general of the People's Liberation Army Academy of Military Sciences, made reference to the sensitive issue in a Monday column in the state-controlled English-language Global Times. He warned a threatened move of a U.S. aircraft carrier into the Yellow Sea in coming months would hurt Beijing-Washington ties. "Imagine what the consequence will be," he said, "if China's biggest debtor nation challenges its creditor nation." Left unsaid: China could unload some of its nearly $900 billion in U.S. Treasury securities, disrupting the U.S. economy without firing a shot.