(FORTUNE Magazine) – MANAGING 50 The Gambler Who Refused $2 Billion Pennzoil' s J. Hugh Liedtke made a historic bet. The initial effect: Everybody loses. by Stratford P. Sherman 58 Companies to Watch MONEY & MARKETS 61 Deep in the Hole in Texas Billions in speculators' losses may well bring down the agency that insures S& L deposits. by Robert E. Norton COMPETITION 68 Winners in the Air Wars Five megacarriers now dominate the U. S. skies, but bumpy rides for passengers will continue. by Kenneth Labich 71 Tips for Fliers in the Hands of the Fearsome Five When not to go, what your rights are, and more. by Marilyn Wellemeyer 81 Icahn' s Juggle: TWA, USX, SEC He has a load of debt, and government lawyers are prying into his dealings with Ivan Boesky. by Carol J. Loomis THE ECONOMY 85 Is the Dollar Too High -- or Too Low? Some mavericks think it' s already undervalued, but most economists say it has further to slide. by Sylvia Nasar POLITICS & POLICY 99 What Congress Is Pushing Now Get ready for a higher minimum wage, costlier health benefits, and a fight over ozone. by Anna Cifelli Isgro PROFILE 106 The Man Brushing Up Colgate' s Image Reuben Mark is shaking the stodgy company awake and putting a smile on its face. by H. John Steinbreder 112 People to Watch TRADE 113 The Peril of Pushing Japan Everyone gets taken prisoner if the battle becomes worse. by Joel Dreyfuss 118 Japan' s Prodigal Young Are Dippy About Imports They' re into Bud, Baskin- Robbins, and BMWs. by Frederick Katayama 121 Protectionism Can' t Protect Jobs At least not without doing more harm than good. In any case, the U. S. is producing plenty of high- paying new jobs. by Michael McFadden SPECIAL REPORT 130 America' s Underclass: What to Do? Some imaginative policies can liberate five million citizens imprisoned by drugs, crime, illegitimacy, welfare, and failure. by Myron Magnet 4 The Editor' s Desk 8 News/ Trends Trade blues, pitching safety, high- tech shopping, the wages of spying, Japan meets Mike Wallace, and more. 16 Follow- Up 43 Letters to Fortune 153 Keeping Up by Daniel Seligman 157 Personal Investing: New Kick for the Bull Market FORTUNE' s quarterly strategy report argues that beefed- up earnings will boost stock prices still higher. by John J. Curran Portfolio Talk: Fund manager Thomas Cashman. 166 Updating the Investment Challenge 170 Office Hours The ages of a manager. by Walter Kiechel III 189 Books & Ideas Is America profligate? by David R. Henderson George Lange photographed the Pennzoil chairman at the Waldorf Towers in Manhattan. See page 50.