Well this seems marvelous: the U.S. is finally pursuing an actual policy on North Korea! We did not, by the way, have one before—unless you count those "six-party talks" in which everyone would get in a room and watch the NK and U.S. envoys sit in their separate corners and refuse to talk to each other. Funny, the same thing used to happen quite a bit back in the fifth grade, but no one pretended we were disarming a nuclear power in the process. But now we're getting serious and plan to shut off Kim Jong-Il's funding:

The new strategies would intensify and coordinate efforts to track and freeze financial transactions that officials say enable the government of Kim Jong Il to profit from counterfeiting, drug trafficking and the sale of missile and other weapons technology.

Some officials describe the steps as building blocks for what could turn into a broader quarantine if American allies in Asia - particularly China and South Korea - can be convinced that Mr. Kim's declaration on nuclear weapons last week means he must finally be forced to choose between disarmament and even deeper isolation. China and South Korea have been reluctant to impose penalties on the North.

This seems in step with the hopes and dreams of White House hardliners—shut off North Korea's funding base and watch the regime collapse. Indeed, influential hawkish academics like Nick Eberstadt have been arguing (plausibly, I think) that all the aid we've been funneling to Pyongyang over the years has only helped prop up the regime. Fair enough, but I'm not convinced that the other countries in the region actually want to see North Korea collapse. Certainly it would be fantastic from a human rights perspective, but in the immediate aftermath, South Korea and China would receive a flood of refugees, and the inevitable downturn in SK's economy following "unification" could hit other Asian countries—especially Japan—quite hard. Which explains, I think, why SK and Japan have been quietly tossing buckets of money at Kim Jong Il's regime—it's not appeasement or an attempt to ward off aggression per se; it's an attempt to avert an economic disaster.

It's telling, I think, that Japan's current threats of "sanctions lite" against NK aren't meant to be all-encompassing or actually threaten the survival of the Pyongyang regime, but merely to put pressure on some of the elites to get back in talks. And Japanese PM Koizumi seems to be pursuing sanctions mainly because of popular pressure—I doubt Japanese political and business elites really want to see North Korea squeezed. I don't know if all this is right, but if it is, we could well see South Korea and Japan soon at odds with the United States over just how far to go in isolating Pyongyang.

UPDATE: See? South Korea's already backtracking on the hard-line, stating that NK's having a nuclear weapon "does not make it a nuclear weapons state."