The United States was closer to war with North Korea last summer than is widely known, sources close to the White House tell Jonathan Swan and me.

And now that same dangerous uncertainty is back.

• The White House is now sufficiently suspicious of the intentions of Kim Jong-un — "Little Rocket Man" to Trump only eight months ago — that Pyongyang would likely have to grovel to get the president to personally re-engage.
• H.R. McMaster, who was President Trump's national security adviser at the time, thought there was a real chance the Pentagon would have to confront Kim Jong-un militarily.
• The U.S. was preparing for military contingencies with enough specificity that spooked the South Koreans, who were worried enough that they brokered the conversations with the North that led to the summit offer.

Jeff Prescott, a National Security Council senior director under President Obama, said Trump "has been acting like a politician seeking a political 'win' rather than a statesman acting in our national interest."

• Why it matters, per Prescott: "[W]e ... find ourselves with heightened risk of war, dimmer opportunities for engagement with North Korea, isolated from our partners, and blamed for today’s outcome."
• "[T]he risks of war are again unacceptably high."

Ian Bremmer, founder of the Eurasia Group, said the announcement is "a big embarrassment for the president, no matter how he tries to spin it."

• "[T]he language in the letter is harsh, and reopens talk of military preemption," Bremmer said. "[T]his is a direct slap in the face to [K]im."
• Bremmer said Trump killed the summit because the risk of a blowup was rising: North Korea wasn't about to accept unilateral denuclearization, and wasn't likely to show up and give Trump personal credit for the breakthrough.

The White House view: Trump believes he got something — U.S. hostages returned from North Korea— for nothing. And he’s followed through on enough threats (strikes on Syria, withdrawing from the Paris climate agreement, moving the embassy in Israel) that Kim Jong-un can't assume he's bluffing.

Be smart: The world now enters a second dangerous summer.  

P.S. N.Y. Times Quote of the Day ... Robert S. Litwak, senior vice president of the Wilson Center for International Scholars, who wrote a detailed study of how to deal with defanging the North Korean threat:

• “Zero warheads was never going to be on the table.”

"Democratic lawmakers said ... they heard nothing in classified briefings by the FBI and intelligence officials to support President Trump’s unsubstantiated allegation that the agency placed a 'spy' into his 2016 presidential campaign," per Reuters' Sarah Lynch and Mark Hosenball:

• What happened: "FBI Director Christopher Wray, Director of National Intelligence Dan Coats and Deputy Attorney General Rod Rosenstein, who oversees Special Counsel Robert Mueller’s Russia probe, held two unusual classified briefings for senior lawmakers of both parties in the wake of the Republican president’s claim."
• Rep. Adam Schiff (D-Calif.), top Democrat on House Intelligence: “Nothing we heard today has changed our view that there is no evidence to support any allegation that the FBI or any intelligence agency placed a spy in the Trump campaign or otherwise failed to follow appropriate procedures and protocols."
• "Republicans had little to say immediately after the meetings."

On balance, the people who run U.S. companies like the Age of Trump, The Economist writes in its cover story:

• "Bosses reckon that the value of tax cuts, deregulation and potential trade concessions from China outweighs the hazy costs of weaker institutions and trade wars."
• The key point: "The financial fireworks on display in the first quarter of this year suggest that this vision is coming true. The earnings of [public companies] rose by 22% compared with a year earlier; investment was up by 19%."
• "But ... the investment surge is unlike any before — it is skewed towards tech giants, not firms with factories."
• Why it matters: "Republicans are right that tax cuts and wise deregulation can boost firms’ competitiveness. But little progress is being made on other priorities, including repairing infrastructure, ensuring small firms are not squashed by monopolies and reforming the education system."
• The takeaway: "A strategy that assumes revenues but not expenses rarely makes sense."

With Sylvester Stallone by his left hand, President Trump holds a posthumous pardon for Jack Johnson, boxing's first black heavyweight champion, more than 100 years after what many see as his racially charged conviction.

• Backstory, from AP: "Johnson ... was convicted in 1913 by an all-white jury for violating the Mann Act for traveling with his white girlfriend. That law made it illegal to transport women across state lines for 'immoral' purposes.'"
• "Trump had tweeted in late April that Stallone, a longtime friend, had brought Johnson’s story to his attention in a phone call."

The Economist launches a real-time midterm model, predicting that Democrats have a 2 in 3 (65%) chance of taking the House, and holding 222 seats, or four more than needed for a majority.

• Current House breakdown ... Republicans: 235 ... Dems: 193 ... Vacancies: 7.

"Mick Mulvaney Is Having a Blast Running the Agency He Detests ... Trump’s pick to lead the Consumer Financial Protection Bureau says he wants to give it the credibility of the SEC" — Bloomberg's Devin Leonard and Elizabeth Dexheimer:

• "Six months into his tenure, Mulvaney [who remains White House budget director while serving as acting CFPB director] is doing everything he can to transform the CFPB from a regulatory crown jewel of liberals."
• "He’s frozen data collection in the name of security, dropped enforcement cases, and directed staff to slash next year’s budget."
• "He also wants to curb the agency’s independence by giving Congress — rather than the Federal Reserve — control of its spending, and replace the powerful director position he fills with a five-person commission."
• Mulvaney: “We are still Elizabeth Warren’s child ... As long as we’re identified with that one person, we’ll never be taken as seriously as a regulator as we should.”
• Keep reading.

"How a Weakened ESPN Became Consumed by Politics ... Arguments over tweets, tension with owner Disney increased anxiety over the network’s future in era of cord-cutting," by Wall Street Journal's Shalini Ramachandran (subscription):

• "Executives at the sports-media giant wanted to seek out new audiences by spicing up shows with opinionated analysis and debate, including on SportsCenter, its struggling news and highlights franchise."
• "But the amount and intensity of political expression generated sharp internal disagreements over whether ESPN was appropriately taking part in the broader national conversation, or whether top executives were encouraging a divisive company culture and giving too much leeway to hosts to promote left-leaning views, both on air and on social media."
• "Conservative ESPN staffers grew frustrated by increased political commentary, including from ESPN executives during the presidential election, and worried about #BoycottESPN hashtags cropping up on Twitter."
• The backdrop: ESPN's "status as cable TV’s most expensive channel had become a liability. As consumers grew fed up with their monthly cable prices, big cable distributors began offering discounted packages that didn’t include the network. Many consumers opted for those offers, while others cut the cord entirely, leading ESPN to shed 16 million subscribers over seven years."
• Why it matters: "There is broad agreement within ESPN that covering sports news means sometimes tackling hot topics like politics and race. The internal debate centered on the tonnage of such coverage, conduct on social media and whether ESPN as a company should take political stances."

Entertainment Weekly has an exclusive excerpt of "The President Is Missing," the joint novel by President Bill Clinton and thriller writer James Patterson, being published jointly by Knopf and Little, Brown and Company on June 4 (preorder).

First look ... A taste for Axios AM readers:

• "We have a lot of balls in the air right now, trying to monitor and defend against this threat. The other shoe could drop at any minute. We think — we hope — that we have another day, at least."
• "After what happened in Algeria, we disclosed nothing publicly. We couldn’t. But then the militia group published video of a dead American online, and it didn’t take long before Clara Cromartie identified him as her son, Nathan. She outed him as a CIA operative, too. It was one gigantic shitstorm. The media rushed to her, and within hours, she was demanding to know why her son had to die to protect a terrorist responsible for the deaths of hundreds of innocent people, including many Americans. In her grief and pain, she practically wrote the script for the Select Committee hearing."
• “I don’t negotiate with terrorists.”
• “Whatever you want to call it,” he says. “Calling them. Hashing things out with them. Coddling them ... You’ve made no secret, Mr. President, that you prefer dialogue over shows of force, that you’d rather talk things out with terrorists.”
• “No,” I say, drawing out the word, my pulse throbbing in my temple, because that kind of oversimplification epitomizes everything that’s wrong with our politics, “what I have said repeatedly is that if there is a way to peacefully resolve a situation, the peaceful way is the better way. Engaging is not surrendering."
• "I spend almost all my time trying to keep this country safe. That requires tough decisions. Sometimes those decisions have to be made when there are many unknowns. Sometimes all the options are flat-out shitty, and I have to choose the least flat-out shitty one."

Worthy of your time: Entertainment Weekly's excerpt, posting soon.

On Instagram, former First Lady Michelle Obama revealed the cover of her memoir, "Becoming," to be published Nov. 13 by Crown Publishing Group, a division of Penguin Random House. (Preorder link.) From the press release:

• Mrs. Obama: "As I prepare to share Becoming this fall, I hope you’ll also think about your own story, and trust that it will help you become whoever you aspire to be. Your story is what you have, what you will always have. It is something to own.”
• "Michelle Obama invites readers into her world, chronicling the experiences that have shaped her — from her childhood on the South Side of Chicago to her years as an executive balancing the demands of motherhood and work, to her time spent at the world’s most famous address."

Avocados on everything ... "The already-popular avocado is getting a turbo boost from higher supply and lower prices — and restaurants are eager to cash in, Bloomberg's Leslie Patton writes:

• "Starbucks Corp. has added avocado spread to its permanent menu ... after a successful test run last year."
• "Last month, Wendy’s added a southwest avocado chicken salad and sandwich to its lineup" — 600 calories.
• "And at restaurants such as Chipotle Mexican Grill Inc., where avocados have always been a big deal, the lower prices may mean wider margins while prices remain low. About half of the company’s orders include guacamole."
• Why it matters: "Avocados’ popularity has broadened as more Americans strive to eat healthier and consume more fruits and vegetables. While the fruit is high in fat, most of it is of the unsaturated variety, which nutritionists say is beneficial. They’re also a good source of fiber, and don’t have any cholesterol."