Can the `city that works' clear smoke from mayoral politics?

Chicago's mayoral hopefuls are sending up so many smoke signals that they are clouding the city's political horizon. Two of the major players aren't telling whether they'll run as Democrats in the Feb. 24 primary or as independents in the April general election. At least two other Democrats say they might run as Republicans. Another Democrat, whose famous father ruled the city for 21 years with a powerful Democratic machine, now wants a nonpartisan election.

``I don't think anyone knows what's going on,'' says veteran political observer Victor de Grazia. ``It's become byzantine.''

The Democrats have become so disorganized that the Democratic National Committee this weekend considered mediating the dispute, before deciding to delay the action.

Although the political smoke is difficult to penetrate, the reason for it is clear. The old equations governing Chicago political power are in a state of flux, analysts say. And as various figures jockey for position, they're trying to find how to make the best use of their resources.

For the current Democratic mayor, Harold Washington, the choice is between running as an independent or as a Democrat. He has sent out separate petitions for candidacy - one as a Democrat and one as an independent. His best move depends on the opposition.

As the city's first black mayor, analysts say, he holds a lock on up to 44 percent of the voting electorate and could easily win running against two white candidates. But in a one-on-one confrontation, they add, his chances of getting reelected as a reform mayor become more difficult.

``He has to maintain a multi-ethnic majority,'' says Paul Green, co-editor of a forthcoming book on Chicago's mayors. ``I argue he has to do that through the party. He can't do it as a reformer.''

While the mayor decides, other Democrats are mobilizing. His archrival, Alderman Edward Vrdolyak, is also sending out a Democratic-independent set of petitions. Former Mayor Jane Byrne, meanwhile, has made a surprising political resurgence, after being defeated by Washington in 1983.

``She has the light [white] constituency and women,'' says Thomas F. Roeser, president of the City Club of Chicago. A Washington-Byrne race would be a tough, bruising battle, although Washington is currently considered the favorite.

On the Republican side - what little Republican side there is to Chicago - things are scarcely clearer. Several well-known Republicans have already taken themselves out of the running. Now, two Democrats, Cook County Clerk Stanley Kusper and State Sen. Jeremiah E. Joyce, say they might switch parties and run for mayor.

Cook County State's Attorney Richard M. Daley wants to throw out parties altogether in the mayoral race. Mr. Daley, who ran unsuccessfully in '83, has endorsed a plan to push all the candidates into a single election. If no one got 50 percent of the vote, the top two vote-getters would face each other in a runoff.

``The current system encourages the politics of factions that have no incentive to reach beyond themselves to the entire Chicago community,'' he said at a press conference Sunday.