Washington ? North Korea has in its own inimitable fashion paid tribute to a little-noticed U.S. push to get the world’s bankers to isolate regimes that promote nuclear proliferation and terrorism. Who else would claim to have conducted a nuclear weapons test and then threaten more blasts to get their way in a $24 million banking dispute?

Don’t they have any good lawyers in Pyongyang? North Korea’s efforts to blame its crossing of the nuclear-testing threshold on U.S. “economic hostility” would be laughable if the regime were not led by world-class paranoids and fantasists capable of believing their own odious propaganda. Americans do not have to believe it, however.

Such a regime may be beyond reasoning with or, even worse, deterring in a conventional sense, as the Bush administration seems to believe.

But Pyongyang’s threats – if not its excuses – must be taken seriously and met with new forms of containment and pressure. The same is true of Iran, the other major target of the U.S. Treasury Department’s efforts “to isolate bad actors from the global financial system” by calling attention to their use of banks for rogue operations.

That description comes from Stuart Levey, Treasury’s undersecretary for terrorism and financial intelligence. I happened to call on him Wednesday a few hours after Pyongyang had threatened more nuclear and verbal blasts if the U.S. continued its “sanctions” policy.

“If the objective was to put pressure on North Korea, well, we succeeded,” said Levey, who has joined Deputy Treasury Secretary Robert Kimmitt in traveling the globe to persuade other governments to examine and, where appropriate, cut financial links to the two remaining members of President Bush’s Axis of Evil.

But the purpose of this effective new effort at using soft power as pressure is much broader. According to Levey, Treasury is targeting people who are eminently deterrable: “People who are in business are very concerned about their reputations and do not want to get involved in illicit activity that is under scrutiny. They will make the decisions about whether they continue doing business or not. We don’t make the decision for them.”

So Levey disputes North Korea’s characterization of U.S. policy as being one of politically driven “sanctions.” Treasury’s efforts are targeted on specific illicit transactions, such as the counterfeiting of U.S. currency, the transfer of funds involved in the smuggling of drugs, arms or even nuclear-weapons components, as well as the financing of terrorist operations.

“The United States effectively lifted sanctions against North Korea in 2000 and the Bush administration has not reimposed them,” Levey asserted. “What we are doing is calling attention to the risks involved in being involved in these transactions.”

The first use of the heavy U.S. financial hammer was against the Macao-based Banco Delta Asia, which Treasury identified last year as a “primary money-laundering concern” for Pyongyang. The bank, which operates under the control of the Chinese government, froze an estimated $24 million in North Korean assets rather than risk losing U.S. and other business. Pyongyang is still boiling over this perceived affront, as its angry statements last week indicated.

“It is important to look beyond this week’s developments,” Levey said, after asking rhetorically if he now needs a security detail. “Look at the receptivity of the world’s finance ministers to accepting that they have a major role to play in the area of global security and intelligence. That is the future.”

However much its self-imposed isolation might seem to protect it from them, North Korea clearly takes these financial pressures seriously. So must Iran. Squeezing the regime financially is probably the only hope (however forlorn it may turn out to be) of keeping Tehran from going nuclear in a few years.

Iran was forced to announce three months ago that its oil production is declining – in large part, experts say, because of a long-term lack of new investment in the oil industry and the difficulty of getting new technology from abroad for its faltering fields.

Access to capital and advanced equipment will not have been helped by the U.S. decision last month to exclude Bank Saderat, Iran’s largest state-owned bank, from buying or selling dollars and other financial instruments from U.S. banks. This is in response to Bank Saderat’s role in transferring millions of dollars to terrorist groups.

In the early days of the Soviet Union, Lenin predicted that capitalists would eagerly sell him the rope he would use to hang them. He lost the bet when Moscow proved unable to pay for ruling an empire. Treasury’s sophisticated efforts to deny gangsters in North Korea and Iran access to global capital should not be abandoned because of the nuclear bluster from Pyongyang and Tehran.