August 8, 1994

Last week's Government figures showed that more than two-thirds of the nation's economic growth in the second quarter came from rising inventories, and that spooked Wall Street more than Main Street. Rising inventories have often been an early warning sign of downturns in production and general economic trouble to come, and that is just how Wall Street interpreted the figures. Bond prices rose sharply as investors bet that the economy would weaken and undercut pressures to raise interest rates.

NEW YORK CITY GIULIANI CLEANS HOUSE It is common for new mayors to bring with them scores of aides, deputies and new commissioners and to award jobs to campaign workers and party officials who helped get them elected. But former and current city officials say that at the middle levels of government, the Giuliani administration is carrying out the largest political housecleaning in years, with the Republican Mayor unbound by ties to the Democratic establishment.

On an island where the automobile is both a necessity and a curse, where the crawl is performed as often on the highways as in the swimming pools, this has been a summer for the record books. From the Elmhurst gas tanks to the potato fields of Riverhead, cars idle and motorists stew. On every parkway, expressway and causeway, lanes are closed, roadbeds are torn up and shoulders are packed with construction equipment. Flashing arrows direct traffic off jammed freeways to jammed service roads and jammed side roads. Forests of orange traffic cones sprout everywhere, taunting exasperated drivers trapped in endless tie-ups.

Reported subway crime fell nearly 18 percent in the first five months of 1994 from the first five months of 1993. There have been approximately 12 felonies a day this year, down from 50 a day in 1990. The transit police attribute the decline in the effort to crack down on minor offenses like smoking and aggressive panhandling, as well as 25 percent increase in the number of officers since 1990 and frequent sweeps for fare evaders. Through Aug. 2, the sweeps have resulted in the arrests of more than 3,000 people for whom warrants were outstanding. Some transit officials fear that the proposed merger of the city's three police forces will allow the Police Department to take officers out of the subways, although the Giuliani administration has pleged to maintain currect levels of policing.

Before Rudolph W. Giuliani was elected Mayor, Albert L. Buzzeo was a caterer in Queens and serving as a Republican district leader. Leonard B. Guttman was a rabbi close to Mr. Giuliani who ran for City Council as a Republican in 1991 and lost. Today they are assistant commissioners in the Department for the Aging, making $73,500 a year. Rosemarie O'Keefe, a Republican district leader from Bay Ridge, Brooklyn, was working as a $26,000-a-year aide to Representative Susan Molinari. Now she is an assistant commissioner of recreation at a salary of $73,500.