July 17, 1984

Seven years ago, an Ecuadorean priest with pinched cheeks and somber demeanor looked out over the depleted congregation at Sunday mass at St. Barbara's Roman Catholic Church in the north Brooklyn community of Bushwick and contemplated what seemed to be a neighborhood's death rattle. Four days earlier, at 9:34 P.M. on July 13, 1977, a power failure plunged New York City into darkness and, within minutes, mobs of looters raced through dilapidated blocks of wood-frame apartments toward Broadway, the neighborhood's main shopping street. By morning, the street, shrouded in the shadows of an elevated train line, was a shambles of broken glass, wooden police barricades, looted stores, flames and smoke - the most heavily damaged street in the city during a steamy night of looting, with 124 stores ruined. Fire and Destruction That was the first blow to the Bushwick section. A few days later, as a less spectacular trail of arson, drugs and crime wove its way through half-abandoned side streets, a 10-alarm fire, one of the largest structural fires in the city's history, erupted near another anchor of the neighborhood, Myrtle Avenue, and destroyed 24 buildings in a four-block area.

Governor Cuomo set the tone and tactics for the Democratic campaign by telling the nation tonight to ''look past the glitter, beyond the showmanship'' of Ronald Reagan's Presidency and see that a regal insensitivity had divided American society ''into the lucky and the left out.'' To a convention of Democratic politicians frustrated by confronting a ''Teflon Presidency'' to which opposition charges will not stick, the New Yorker advised that instead of trying to match Mr. Reagan's oratory, they forcefully attack ''the hard substance'' of the Reagan record and its impact on American society. In a speech that was both shrewd and forceful, the New Yorker told the Democratic partisans that the road to victory lay in separating ''the salesman from the product,'' in distinguishing between a popular preacher and his controversial programs. A Speech Like a Lawyer's And, with a pounding refrain against the fairness of the Reagan policies, he sought to undercut the public relations skill of the Reagan White House by asserting that ''no slick commercial, no amount of geniality, no martial music'' could muffle a well-honed Democratic message.

The United States, seeking to avoid a crisis within the Pacific alliance, will probably not send Navy warships to New Zealand waters until mid-1985 at the earliest, senior American officials said Monday. This means, an aide to Secretary of State George P. Shultz said, that the new Labor Party Prime Minister, David Lange, will have a ''comfortable amount of time'' to decide whether to maintain his party's pledge to ban all nuclear-powered and nuclear-armed ships from New Zealand's waters. Alternatively, the aide said, Mr. Lange could seek to modify the pledge and thereby avoid a possible break in the 33-year-old Anzus alliance with the United States and Australia. Anzus stands for Australia, New Zealand and the United States.

For Walter F. Mondale and his senior aides, the past few days have been trying and turbulent. But for one group of political veterans they have been as sweet as a Vidalia onion. The resurrection of Bert Lance, who was named general chairman of the Mondale campaign, has rejuvenated many of the young men and women who took the fall with Jimmy Carter in the 1980 election. For now, at least, they feel accepted, if not vindicated.

In 1971, during her sixth pregnancy, Rita Noe took Bendectin, a prescription anti-nausea drug - and her daughter, Michelle, was born with a webbed left hand. Last weekend, on Michelle's 12th birthday, Merrell Dow Pharmaceutical Inc., the Cincinnati-based manufacturer of Bendectin, agreed to put $120 million into a settlement fund to pay damages to the Noes and more than 700 other families who have filed lawsuits arising out of birth defects they say were caused by Bendectin. Mass settlements in product liability cases are a relatively new phenomenon that theoretically allow companies to put product liability claims behind them in a quick, if expensive, stroke. The proposed Bendectin fund, to be endowed over 18 years, would be the third-largest settlement fund in history. ''We're very happy about the settlement,'' Mrs. Noe said. ''Court proceedings can be very long and drawn out, and if we can, we'd like keep Michelle from going through a trial with all the attendant hassle and media. The only reason I would want a jury trial would be to bring out the fact that the drug is unsafe, but actions speak louder than words, so I guess that's established, no matter what the company says.''