President George W. Bush looks like a man who is so obsessed with hunting a pesky but elusive mouse in his basement that he fails to notice that the top floor of his house is on fire.

Two recent events capture the bizarre, almost surreal nature of the twin crises over Iraq and North Korea that now confront the stumbling Bush administration.

In February, as North Korea was threatening to “burn” South Korea and its American defenders, Japan, and Okinawa with weapons of mass destruction, the Bush administration rushed Patriot anti-missile batteries manned by U.S. Army personnel to Israel, which already had operational its own U.S.-financed $2.4 billion Arrow anti-missile system.

Defending Israelis against Iraq, which might have a few old Scuds hidden away, was clearly a higher priority for the Bush administration than rushing additional Patriots to protect the 100,000 U.S. troops in South Korea and Japan who are in range of North Korea’s 800 or more missiles, some of them nuclear-, chemical-, and biological-capable.

Soon after, CIA Director George Tenet warned Congress that North Korea had developed its long-range Taepodong-II ICBM to the point where it was capable of delivering a nuclear warhead to North America. But the media were so busy trumpeting spurious administration stories about Iraq’s mythical chemical trucks—a.k.a. “Winnebagos of death”—that they barely noted Tenet’s deeply alarming revelation.

After this bombshell, President George Bush shrugged off the threat from North Korea in a March press conference as a “regional” problem and said it would be addressed through patient, multilateral diplomacy.

Yet Iraq, which has absolutely no offensive military capability and, very probably, few weapons of mass destruction, is such an urgent threat, according to Bush, that American lives must be spent to conquer it without delay.

By contrast, North Korea—which has three to five nuclear weapons and more on the way, medium- and long-range missiles, a huge military, and 5,000 tons of poison gas and germ weapons—is, according to Bush, merely a local problem to be solved through talk. This logical and military inversion of reality is worthy of “Alice in Wonderland.”

Iraq, Bush insists, must be attacked because at some vague future date it might give or sell to anti-U.S. terrorist groups nuclear or biological weapons that it might develop, though Baghdad did not do so from 1991 to 2003.

Meanwhile, North Korea has produced and smuggled counterfeit currency and assorted illegal drugs around the world, blown up airliners, sold Scud missiles and other arms to the Mideast, and is clearly the world’s most likely black market purveyor of nuclear or biowarfare weapons for hard cash. Yet it is not considered a threat, according to the president’s astounding illogic. Perhaps the Bush administration will remain in denial over North Korea until the Hermit Kingdom begins selling compact nuclear weapons on e-Bay.

The real reasons North Korea is not in Bush’s gun sights are, of course, that it does not challenge Israel, has no oil, and plays no role in Christian Armageddonism. The pro-Israel lobbyists and Dr. Strangeloves who have seized control of U.S. foreign policy do not want their jihad against Iraq to be diverted or distracted by a crisis with North Korea. Ironically, however, it was one of their members, a former Bush speechwriter, who helped trigger the current crisis with North Korea by inserting the idiotic, inflammatory phrase “axis of evil” into the president’s State of the Union address in January 2002.

This adolescent sobriquet convinced North Korea’s nervous leadership that the increasingly hostile Bush administration was indeed bent on an invasion and “regime change” in Pyongyang. Bush’s now notorious phrase was seen as signaling a major policy shift by his administration.

When North Korea’s plutonium-based nuclear program was revealed in 1993, President Bill Clinton briefly considered war but then chose bribery as the lesser evil. Under the so-called Framework Agreement, backed by South Korea, Japan, and the EU, Pyongyang was promised two light-water nuclear reactors, fuel oil, food, and cash to mothball its plutonium nuclear weapons program and put it under UN supervision. CIA warnings that the North already had two or more nuclear weapons were hushed. All concerned were happy to pretend that North Korea was good as gold, though there were persistent reports that it was secretly enriching uranium and developing new chemical and biological weapons. Pyongyang took the agreement with the Clinton administration as a de facto non-aggression pact.

But the advent of the Bush administration nullified Clinton’s see-no-evil policy. Hardliners in the Pentagon and White House made plain their hostility to North Korea and, rightly, voiced suspicions about its covert nuclear programs. Pyongyang was quick to notice and grew deeply alarmed as the new administration pressed for war against Iraq and proclaimed a crusade to disarm all “rogue states.”

When Defense Secretary Donald Rumsfeld branded North Korea a “terrorist state,” Pyongyang became convinced, quite incorrectly, that it was next in line after Iraq for regime change. Once again, the administration’s arrogance and lack of understanding of foreign affairs had created a diplomatic crisis.

Seeking to repeat its success in 1993-1994, North Korea once again rattled its nuclear sabers as a way of deterring any U.S. attack and extorting more aid from Washington, Tokyo, and Seoul. The prickly Koreans are a tough, highly nationalistic, emotional people who are not to be trifled with. If you ever wondered what became of the mightily fearsome Mongols of Genghis Khan, many ended up on the Korean Peninsula.

The Kim regime was wagering that North Korea’s huge, 1.1-million man military and its 800 missiles pointed at South Korea, Japan, Okinawa, and Guam would impress on Washington that any major American attack on North Korea would ignite a bloody, full-scale war, with the overhanging threat of possible nuclear strikes in which Seoul, Tokyo, Osaka, Okinawa, and perhaps even Los Angeles or San Francisco would be vaporized.

Pyongyang was, however, also developing a less obvious, subtler strategy: winning the hearts and minds of South Koreans. North Korea remains the world’s only Stalinist dynasty. Founder Kim Il Sung successfully passed his throne to son Kim Jong Il, who is now preparing his young son for succession as Kim III. Kim I developed Juche, a political theology of ferocious nationalism, leader worship, and total independence from the outside world. “Glorious Leader” Kim’s legacy to his son was an army disguised as a state, the Mongolish theology of Juche, and a command to “liberate” South Korea from what the communists termed “U.S. colonial occupation.”

Older South Koreans, particularly Christians, who vividly recalled being rescued by the United States from the North’s bloodthirsty “liberation” during the Korean War, scorn Pyongyang’s calls for national unification under the Kim dynasty. The recent election of independent-minded President Roh Moo Hyun, who has strongly opposed any U.S.-led war against North Korea, somewhat weakened North Korea’s accusations, but there is still a strong feeling among many Koreans that their government is too responsive to Washington’s orders.

To some younger South Koreans, the grotesquely retro-Stalinist regime up north is the true embodiment of Korean nationalism. In their view, Pyongyang confronts the overbearing Americans, who have ordered Koreans around for 50 years, terrifies the despised Japanese with its nuclear weapons, is self-reliant and truly independent, and commands the fear if not respect of the world.

Kim Il Sung’s final instruction to his heir was to “liberate” South Korea at all costs. That, more than extorting food or fuel from the West, remains Kim Jong Il’s filial duty and primary objective. Kim appears to believe that by engineering a number of crises and confrontations with the United States, he may eventually force the Americans to withdraw most or all of their permanent 37,000-man garrison from South Korea.

Interestingly, in the first week of March, the usually bellicose Secretary Rumsfeld announced he was considering moving some of the U.S. Korean garrison south away from the Demilitarized Zone (DMZ), to Japan, or even home. The U.S. spends over $7 billion per annum keeping these troops in Korea and, in a sense, they have become hostages to North Korea’s artillery and weapons of mass destruction.

The entire U.S. 2nd Infantry Division, based just south of the DMZ, is within range of 10,000 North Korean heavy artillery pieces and rocket batteries—many capable of firing chemical or biological weapons. The remaining 22,000 army and air force troops at headquarters and air bases farther south are all within range of North Korean short- and medium-range missiles, strike aircraft, and its 100,000-man-strong commando force.

South Koreans, whose country was virtually razed in the 1950-53 Korean War, are acutely aware and deeply fearful of the dangers of a new conflict. The past prime minister, Kim Dae Jung, massively bribed North Korea through his “Sunshine Policy” to dampen down the threat of war, going so far as to slip Kim Jong Il secretly up to $1.7 billion for an historic summit meeting in 2000. The North reportedly spent the bribe money on arms. The new president, Roh Moo Hyun, has made clear he will oppose war at all costs and may consider withdrawal of U.S. forces from his nation, though replacing the U.S. garrison and war stocks alone could cost South Korea—whose modern armed forces number 686,000—some $30 billion.

Each time the U.S. reacts to North Korean provocations by threats of force, a fissure opens wider between America and the South Korean public, a process that obviously encourages Kim Jong Il to press his brinksmanship against Washington. If the U.S. garrison is withdrawn, or substantially reduced, North Korea believes it has a good chance of either successfully invading the South, intimidating its government into co-operation, or even achieving long-sought “fraternal reunification.” Until recently, the threat of U.S. tactical nuclear weapons was enough to deter any North Korean attack, but now that the North has a nuclear counterforce, America’s nuclear option has largely been nullified.

As of today, South Korea fears more what it calls “unexpected reunification”—the total collapse of North Korea, producing 24 million starving refugees —than invasion. But this could change if the U.S. military and nuclear umbrella is withdrawn. North Korea’s army need advance only 200 miles south from the DMZ to Pusan to engulf all of South Korea. Kim, however, must be hoping that younger, nationalistic South Koreans will rise up and embrace Juche, regarding him, rather than South Korea’s bland, colorless, and corruption-plagued presidents, as their natural leader.

Kim Jong Il may be able to last out his war of nerves against Washington and even, one day, “liberate” South Korea. After all, if Washington can “liberate” Iraq, why can’t Kim “liberate” South Korea? While some of Kim’s people continue to starve due to poor harvests, the government, Communist Party cadres, and the armed forces are believed to have a two-year supply of fuel, food, and war stocks. The Pyongyang regime continues to count on foreign benefactors to make up its food deficits so that hard currency can be reserved for buying arms and spare parts from abroad.

Given these realities, Bush’s downgrading of the North Korean threat from a hurricane into a minor tropical depression is a dereliction of duty. The Pentagon’s claims that it can wage two wars simultaneously in the Mideast and North Asia are nonsense. Bush has deployed at least seven of the 13 U.S. combat divisions in the Gulf, as well as much of America’s tactical, carrier, helicopter, and heavy armored units. A major war with North Korea will, by Pentagon estimates, require 750,000 U.S. troops backed by at least five carriers, and produce 250,000 American casualties. Total active U.S. armed forces number only 1.4 million; the U.S. Army, 485,500—half of whom are now in the Gulf. If war erupts in Korea, by the time U.S. reinforcements get to Japan, the North Korean army might well have occupied all of South Korea, including Seoul and Pusan.

In the time it takes Bush to finish off Iraq—and deal with an ensuing bloody, Lebanon-style mess in chaotic Mesopotamia—North Korea will have produced four to five more uranium nuclear warheads and a score of medium- and long-range missiles, the latter of which can threaten North America.

North Korea has vowed to treat the sanctions being threatened by Washington as an act of war. A few 10,000-shell barrages on U.S. troops along the DMZ would ably deliver his riposte. Bush’s hopes that China will somehow convince North Korea to disarm are too optimistic. China has little interest in doing so or in seeing U.S. influence grow on the Korean Peninsula. Friendly North Korea protects China’s northern flank. Japan, for its part, is quite content with the status quo: a united, nuclear-armed, Japan-hating Korea would become a major military and economic rival.

Then what is to be done? First, recognize that North Korea, not demolished Iraq, is the real and urgent threat to the United States. Second, strengthen U.S. military forces in North Asia. Third—the most distasteful step—resume bribing Pyongyang to be good. This means ceasing nuclear arms production and accepting return of UN monitors. Washington could just as well bribe Saddam Hussein as Pyongyang to behave and accept rigid inspections. Bribery, a time-honored tool of foreign affairs, is always much cheaper than fighting wars.

Kim Jong Il does not want nuclear war. He is not a madman. Like Saddam Hussein, he wants to safeguard his regime and perpetuate his hold on power. Kim needs western aid and hard currency to keep his nasty little Asian Sparta alive. These wants and needs are amply answered by hard cash rather than the earth-penetrating nuclear weapons the Pentagon is currently developing for use against North Korea’s underground nuclear facilities.

Why fight when you can buy or at least rent? In the end, after all the huffing and puffing by the Bush administration, it will very probably follow the lead of the Clinton White House in opting to pay off the “Beloved Leader.” Waging quick wars against almost defenseless nations like Afghanistan and Iraq is one thing; fighting a nation with a large, tough military like North Korea is quite another. Even President Bush, who made sporadic appearances at the Texas Air National Guard to avoid regular military service during the Vietnam War, must have gleaned enough martial knowledge to know not to fight nations that can bite back hard. North Korea is no Panama.

Other small nations will look and learn, drawing the logical conclusion from Bush’s actions towards Iraq and his meek behavior towards North Korea that the only way to be safe from a rampant United States drunk on its own unrestrained power is quickly to develop their own nuclear weapons: an ironic and unwelcome outcome for America’s supposed anti-proliferation campaign.

Long derided for his odd looks, weird hairstyle, and pot belly, “Beloved Leader” Kim Jong Il has revealed himself to be a tough, clever player of high stakes poker who is making the best out of a very poor hand. Kim has called Bush’s bluff by “outing” his nuclear program, expelling UN inspectors, and firing up his reactor at Yongbyon—virtually challenging Bush to “come and get me.” George Bush quickly backed down when confronted by the “Beloved Leader’s” treasured nukes. In Asia, this means a huge loss of face for the American president and a major coup for Kim Jong Il, who seems destined increasingly to haunt President Bush’s dreams of greatness, empire, and glory.

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Eric S. Margolis is the author of War at the Top of the World: The Struggle for Afghanistan and Asia and a columnist, commentator, and war correspondent.