Monday, April 1, 2013
Posted by dkuehn at 7:41 AM
Feel free to comment on this funny post on the more serious issue of North Korea, if you like. I find recent developments disconcerting, not for the U.S. directly so much as for the South. Economists generally get skittish if they feel reason to doubt that they're dealing with a rational actor, and that's the source of my doubt in this case.
"Rational" is a very low bar - both in economics (it does not mean we're dealing with perfect calculators) and in this case. Kim Jong Il was rational in the sense that we had a sort of kabuki with him that followed its own logic, and under those circumstances saber-rattling was just part of the game of pursuing concessions. That may be the case here too. What worries me is that there seems to be a unique level of escalation by a leader that is under a lot more pressure. This might meander into a new kabuki, but with 50 million living in a modern democracy to the south and about half that essentially being held hostage in the north I reserve the right to be nervous until it does.