Private Sector

The Riordan Administration may be remembered as the last great attempt to run city government from the private sector. But there are serious governmental and ethical problems in taking this route. There is a long history of business interests dominating public decisions in Los Angeles. But the city is a different place today--big corporations are not the city's economic engines anymore--and, consequently, odds are that Riordan's style of governance will not turn Los Angeles around.

Zhang Guangrong and Ge Hongmiao preside over the Freshwater Products counter--specializing in live eels, crabs and turtles--at the government Xidan Market in central Beijing. Over the last four years, they have noted a remarkable consumer trend that says much about the wildly growing Chinese economy and the tightrope act by leaders here to keep it under control. Prices have shot up.

During a visit to Los Angeles last year, Hope Gleicher looked out of her downtown hotel window to a plaza below and was appalled by the sight of so many homeless people aimlessly milling about or sleeping in cardboard boxes. "I couldn't forget that picture," Gleicher said. "The problem was on a greater scale than anything I'd ever seen, even in New York City."

Two top aides to Los Angeles Mayor Richard Riordan resigned Thursday to return to the private sector. In addition to Gary Mendoza, deputy mayor for economic development, who announced earlier this summer that he would leave the administration after a little more than a year, Deputy to the Mayor Steve Sugerman quit his post of communications director. Neither Sugerman nor Mendoza has taken a new job yet.

Countering Amtrak's pleas for more money, a congressional advisory panel said Thursday that private companies should be given a chance to make passenger trains more efficient and successful. The Amtrak Reform Council called for competition in passenger rail, currently the exclusive domain of Amtrak. Two companies expressed some interest. "The system we have today, the old Amtrak, has not worked and is not working," said Gilbert Carmichael, chairman of the reform council.

For the second time in a decade, California's economy seems headed for calamity. The state's budget shortfall is approaching $40 billion, companies are shedding jobs, government employees face imminent layoffs and the costs of doing business continue to rise. In some business circles, California is rapidly reclaiming its early-'90s reputation as one of the worst places in the country to invest in and grow a business. There is also bad news for the state's dominant liberal leaders.

To Daniel J. Mitchell, there is hardly an area of government that can't be improved by competition from the private sector. Education? Let private and public schools compete for kids. Housing? Give poor people vouchers and let landlords compete for them. Social Security? Let workers decide which investment plan will produce the biggest nest egg.

Grinning happily, Gov. George Deukmejian announced Thursday that he will not run for a third term in 1990 and instead will look for "new challenges" in the more lucrative private sector. The Republican governor said he decided, among other things, that he could be more effective dealing with the Democratic-controlled Legislature in the next two years if he did not run for reelection.

Once dubbed the "happy barracks of communism" because of its relative prosperity in an underprivileged bloc, Hungary now seems held back only by its own pessimism from becoming Eastern Europe's happy bastion of free enterprise. The fretful people of this tiny nation have emerged from a winter of hand-wringing to the surprising realization that they may be muddling through the worst of their transition to a market economy.

President Bush, preparing a package of economic assistance "for the sake of a stable and prosperous Poland," is expected to propose the creation of a $100-million fund to invigorate the struggling Polish economy's private sector, White House officials said Sunday night. The President, who arrived in Warsaw on Sunday evening, greeted a Poland in the midst of political upheaval and struggling to achieve economic reform, and pressed ahead with his call for a Europe that is "whole and free." With U.