(FORTUNE Magazine) – COMPETITION/COVER STORY 50 AMERICA'S HOTTEST EXPORT: POP CULTURE All around the globe, folks just can't get enough of America. But we're not talking cars and televisions. The world's insatiable appetite for Hollywood and rock & roll is what's propping up the U.S. trade balance. Now the Japanese own Bruce Springsteen -- and want more of what is being termed the ''new media.'' The way manufacturers figure it, all that software is going to create demand for a lot of new hardware. by John Huey

52 WHY MATSUSHITA BOUGHT MCA

THE SOVIET UNION 62 EXCLUSIVE INTERVIEW: WHAT GORBACHEV WANTS FROM BUSINESS In his first interview with a U.S. business magazine, the Soviet President asks private enterprise to help bail out his battered economy -- and to deploy its forces as fast as it can.

THE ECONOMY 67 WAR'S COST TO THE ECONOMY Even if victory in the Gulf came swiftly, rising oil prices would make a downturn worse. Damage to Saudi oil facilities could cut GNP growth by two percentage points for a year. by Robert E. Norton

68 WHY THE EMBARGO WON'T WORK SOON

MANAGING 70 HOW TO PLAN FOR 1995 In a volatile world, the old-style five-year plan is virtually useless. Instead, remember two words: focus and flexibility. They're what you'll need for the unpredictable decade ahead, when the only sure thing is heavy competition. by Ronald Henkoff

TECHNOLOGY 80 CAN POWER LINES GIVE YOU CANCER? The returns aren't in on possible risks from common electromagnetic fields, but utilities and VDT makers are responding. A few precautions may be worth taking. by David Kirkpatrick

82 A QUICK COURSE IN WHAT THEY CALL PRUDENT AVOIDANCE

INNOVATION 86 PRODUCTS TO WATCH A wireless phone jack that makes adding an extension a snap, a multilingual VCR, math as a hit game, and more. by Stephanie Losee

EXECUTIVE LIFE 88 READ THIS OR WE'LL CUT OFF YOUR EAR U.S. companies are spending $1 billion a year to protect top executives and their families from terrorists and other attackers. Many don't see the threat realistically. by Alan Farnham

CORPORATE PERFORMANCE 94 AN AIRLINE THAT SOARS ON SERVICE Even the bankruptcy of his U.S. partner, Continental, is only a minor bit of turbulence for SAS's Jan Carlzon -- Northern Europe's answer to Lee Iacocca. by Kenneth Labich

98 COMPANIES TO WATCH Federal Signal is doing a booming business making emergency vehicles and gear. by Ret Autry

Also: Pharmacy Management Services, Acclaim Entertainment, and Porta Systems.

THE SOCIETY 100 THE FACE OF RURAL POVERTY Is it easier being poor in the sticks than in the city? No. It's just easier to be forgotten. Hidden in the hollows of Appalachia, in makeshift villages along the Rio Grande, and on the back roads of Maine, the remote and invisible world of the rural poor endures. by Lee Smith

DEPARTMENTS

4 EDITOR'S DESK

8 INDEX

12 NEWS/TRENDS The $6 billion raid on NCR, a Grinch economy, fishy business in Congress, Japan's real estate softens, what's hot, what's not, and more.

23 FORTUNE FORECAST The great debt overload is likely to keep the recovery following this contraction feeble, says our guest columnist. But come the mid-Nineties, good times will roll. by Henry Kaufman

37 PERSONAL INVESTING Where to stash your cash so that you can get strong yields and not lose any sleep. by Karen Nickel

Also: Tax planning at the 11th hour, hot stock picks south of the border, and Portfolio Talk with Ronald McGlynn of Cramer Rosenthal McGlynn.

111 FORTUNE PEOPLE Donald Bren seeks a few good yen, Beaux knows Adidas, and more. by Mark M. Colodny

112 ON THE RISE

113 BOOKS & IDEAS Our free-market reviewer finds a lot to like about liberal economist Paul Krugman's wide-ranging look at America's future. by David R. Henderson

115 LETTERS TO FORTUNE

119 KEEPING UP Delusions on Wall Street, terror in Gotham (or New York's new batting champs), the biased sex, and other matters. by Daniel Seligman

ABOVE: U.S. influence on fashion extends even to this Budapest disco, photographed by Peter Korniss.

COVER: Designer Mark Rosenthal and art director Margery Peters used a Warholesque technique to create the images from photos and line art.

Cover (from top left): Madonna -- Lorraine Day (Sire); Coca-Cola is a registered trademark of the Coca-Cola Co.; Arnold Schwarzenegger -- M. Childers (Sygma); Mickey Mouse (c) 1990 the Walt Disney Co.; MTV is a registered trademark of MTV Networks, a division of Viacom Intl. Inc.; Teenage Mutant Ninja Turtles (c) 1990 Mirage Studios -- E. Lee White (Outline); Levi's is a registered trademark of Levi Strauss & Co.; Julia Roberts -- Ron Batzdorff (Touchstone Pictures); McDonald's is a registered trademark of McDonald's Corp.; Sylvester Stallone -- Matthew Rolston (MGM/UA Distribution Co.).