All-Star Panel: North Korea bluffing or ready to strike?

This is a rush transcript from "Special Report," April 10, 2013. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

CHUCK HAGEL, DEFENSE SECRETARY: Their actions and their words have not helped defuse a combustible situation. In the event that does not occur, as we have said many times, our country is fully prepared to deal with any contingency, any action that North Korea may take or any provocation that they may instigate. And we have contingencies prepared to do that.

GEN. MARTIN DEMPSEY, JOINT CHIEF CHAIRMAN: In the absence of concrete evidence to the contrary, we have to assume the worst case. And that's why we're postured as we are, today.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: Pentagon briefing today, as there are more provocations from North Korea, warnings to South Korea that something may happen soon, possibly a missile test, possibly nuclear test. We're back with the panel. Jim, it seems like this is going to another level, and the administration is trying to read it and trying to see exactly what level of response they should give Kim Jong Un.

JIM RUTENBERG, THE NEW YORK TIMES: Paging Dr. Secretary Kerry who goes to the region later this week. It is a big test for Kerry for starters. But here is your Asia pivot in sharp relief. The administration has been talking about kind of sending new force deployments out and they had to fast track it. China is in a really interesting bind. But as usual – here we are at another standstill. What gets me is the disconnect between the sort of joking about it and the grave seriousness of the threat potentially.

BAIER: Steve?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think, that last point is an important point, just in terms of the public understanding the potential threat here. This has a possibility with miscalculations, or misunderstandings, or miscommunications of spiraling out of control and spiraling out of control very quickly. And not to sound like an alarmist about it, but I am not sure the public sees that because they saw Kim Jong Il, they see Kim Jong Un, they don't know – they don't understand, I think, maybe the magnitude of the potential threat.

Look, I am glad Martin Dempsey said what he said because he shored up Chuck Hagel. Chuck Hagel saying that the North Koreans have not helped diffuse the situation might be the understatement of the millennium. If you're going to talk tough, talk tough. They have not only not helped defuse it, they have triggered all of this, they're doing all of this. And I hope the administration has a stronger stance behind the scenes than Chuck Hagel articulated today.

BAIER: We reported this communication line that is open up in New York. And they have, the U.S. communicated in March with North Korea before all this bluster started. It is interesting that they chose to do that at that time.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I am not sure it is in response to anything we have done. I think this is response to internal events, the rise of this little guy who is either in charge or he's a puppet of his uncle or others. We don't really understand.

But I think there are two scenarios. The good one – the one where there is an off-ramp is, he builds up all of the tension with all the rhetoric, and then he shoots off this missile that doesn't have a nuke on it and lands harmlessly in the Pacific Ocean. It is like a Woody Allen-Kubrick movie, and it's over. The second is that he doesn't have an off-ramp and he doesn't know what to do. The bellicosity increases, he feels he has to show his strength and perhaps he believes that he's being surrounded and America wants to invade.  These people are paranoid and crazy at the same time.

I'm not sure -- I think it is more likely that scenario one happens, but we have to be prepared for scenario two. It seems as if the military is -- I am not sure the political leadership on our side.

BAIER: There was some sense Jim that even the administration was concerned about moving too much that way to do just as Charles suggests spook Kim Jong Un to some action that we are acting.

RUTENBERG: Right. It's such a delicate balancing act. But at the same time they have to satisfy – we haven't mentioned it -- South Korea which -- how long can they sit and field these threats? So that is another wild card and, of course, we have zero control over 90 percent of it.

KRAUTHAMMER: If Japan started speaking about acquiring a nuke, I think China will respond quickly and favorably.

BAIER: To our point here -- by the way, we'll continue this talk and more talk about the budget. We didn't talk about guns or immigration. Big news there. The online show is tonight, make sure you tune in for that. To our point about what is going on, on other show about this issue, stay tuned. One show has its own update on North Korea's moves.

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