NEWS ANALYSIS : Hussein Band-Aids Fail to Cure Iraq Ills : Mideast: Inflation, shortages, Kurds and crime defy the strongman’s superficial solutions.

With all of his muscle and all of his men, Iraqi President Saddam Hussein still can’t put prewar Iraq back together again. Patches, PR and political shake-ups have not covered the cracks.

The problems include inflation, shortages, Kurds and crime, and as the Iraqi strongman papers over one, another emerges. The voice of the man who influenced the Arab world as a military Colossus, a new Saladin, when the decade opened is now heard only in Iraq. He is trying to convince his people that they won the Mother of All Battles, that pride should fill their stomachs.

He’s having problems.

“I think the situation is getting out of hand,” said a top U.N. official who is based in Baghdad and was in transit recently through Kuwait. But, he pointed out, with Hussein’s ruthless security force back in place, the immediate threat is not to him but to any sector that will not knuckle under.

The Kurds may be the first to feel the renewed presidential backlash. Hussein has tried to bring them into the fold with promises of autonomy and democracy, and at times has appeared successful in at least splitting the Kurdish camp.

But Wednesday’s surprise decision to sack his son-in-law as defense minister and turn the army over to a notorious hard-liner is expected to send shivers into the mountain redoubts of Kurdish guerrillas.

Ali Hassan Majid, the new minister, reportedly once told a Kurdish delegation in Kirkuk: “You remember me. I’m Ali Chemawi.” The name means Ali Chemical; Majid was the man who used the weapon against the Kurdish civilians in the infamous attack on the town of Halabjah in the war with Iran. In the Persian Gulf War, Majid commanded the Iraqi occupation regime in Kuwait, applying his brutal techniques against the resistance forces there.

Majid is a cousin of Hussein, and he takes over the military from Hussein Kamel Hassan, the president’s son-in-law. The new defense minister retains his authority as interior minister, putting all security forces under his control.

Hussein’s tight circle of leadership--many, like Majid and Hassan, from his home city of Tikrit, and others revolutionary comrades from the Arab Baath Socialist Party--present a tough image, an accurate portrayal of the regime.

Saadoun Hammadi, Hussein’s choice as prime minister in the immediate postwar months, was dumped two months ago and replaced by a nonentity. The change made clear that Hussein alone calls the shots, in case there had been any doubts.

Observers in Baghdad note that Hammadi--an American-educated former foreign minister but a firm Arab Baath Socialist--did away with military fatigues for Cabinet ministers, bringing in Western suits. His replacement, Mohammed Hamza Zubaidi, went back to uniforms. (Press reports say Hammadi is now back in the Cabinet as one of Hussein’s 10 untitled advisers.)

The president’s most difficult problem is not Kurdish guns but the collapse of the family economy in the heart of Iraq. The dinar no longer buys a decent life for Baghdadis. In the midst of all the security for political control, crime has become an ugly stain on the regime. Robberies are reported regularly in the press. A racket in stolen cars has broken out. Justice Minister Shabib Maliki called this week for hanging car thieves.

In a dollar black market, underpaid government workers and others with marginal buying power represent tinder for a food riot. Nevertheless, the president and his men say Iraqis will eat dates rather than submit to a U.N. plan that would allow the regime to sell its oil to buy food and other necessities but would require U.N supervision of distribution to assure that supplies do not go first to the president’s privileged loyalists.

“Iraq can live under siege for 20 years to come without asking anybody for anything,” Hussein declared recently, proud words but increasingly out of touch with the realities in Baghdad. Supplies are coming in daily by road from Jordan, the U.N. official said, but few go onto the open market.

Prince Sadruddin Aga Khan, U.N. Secretary General Javier Perez de Cuellar’s personal envoy to Iraq, is expected to go to Baghdad next week to press the U.N. plan. He has already heard the Iraqi response: Trade Minister Mohammed Mehdi Saleh declared, “People are dying daily, but this only strengthens our resistance.” There are no polls to test popular support of his assertion.