Everyone is aware that Washington is not about to send the Marines into Georgia to assert its regional interests, but what are the realistic diplomatic and economic penalties that could be leveraged against Russia? The Bush Administration will be looking to save face, but as we have speculated, its range of options is rather limited.

The Wall Street Journal elaborates a couple of ways that Russia may find itself punished for the war in Georgia:

Western authorities should also explore the vulnerability of Russian assets abroad. At the least, they can make life difficult for the holders of those assets. Post-Soviet Russia allowed the emergence of businessmen and entrepreneurs who indeed wish to function as normal participants in world commerce. Their number, however, assuredly includes the lucky billionaires under Mr. Putin’s protection. All of them want to benefit from the West’s rules. That privilege should be restricted so long as Mr. Putin breaks the rules.

In the world of global commerce, reputation matters. China has calculated that its own ambivalent reputation can only gain from staging the Olympic extravaganza. The glow of the Games is money in the bank. By contrast, the Putin government has embarked on a strategy that seems to believe its power grows in sync with its reputation as an international pariah, an outsider state.

Mr. Bush said Friday that “Russia has damaged its credibility and its relations with the nations of the free world.” True, and if the West remains firm, it can make clear to Mr. Putin that the political price of behavior beyond the pale of normal relations is high. Overrunning Georgia was easy. Life after that should not be.

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