(FORTUNE Magazine) – CITIES/COVER STORIES 52 THE BEST CITIES FOR BUSINESS With companies squeezing costs tighter than ever, locations that give you the most for your money are hot. Here's where to find America's outstanding values. by John Huey

64 THE TOP TEN And in first place -- Atlanta.

73 THE REST OF THE MAJOR CITIES How 40 other big cities stack up.

86 WHAT'S THEIR SECRET? Three unlikely locales have produced a remarkable crop of industry-beating FORTUNE 500 companies. Folks who live there take it in stride. by Laurie Kretchmar

89 CALIFORNIA FACES THE GOODBYE WAVE Frenzied growth and runaway costs are tarnishing its future. Many businesses are leaving. But America's trendsetter may yet show others how to cope. by Nancy J. Perry

CORPORATE PERFORMANCE 93 BEHIND THE MESS AT WESTINGHOUSE The grand old electric company is shorting out on bad loans made by its credit subsidiary. The crisis may deepen before it gets better. by Peter Nulty

102 COMPANIES TO WATCH Garbage gives off the sweet smell of success at Mid-American Waste Systems, an Ohio company that is expanding in part through acquisitions that add to existing routes. by Shelley Neumeier

Also: Komag and Employee Benefit Plans.

POLITICS & POLICY 105 REPORT CARD ON BUSHONOMICS Critics claim Bush lacks a domestic economic strategy. Nonsense. He has ambitious goals and is relying on market forces to meet them. The real question: Is it working? by Louis S. Richman

COMPETITION 118 MA BELL AND SEVEN BABIES GO GLOBAL U.S. telecommunications companies are rushing abroad, where the big growth in the industry is. Successful strategies include picking good partners and sticking to basics. by Andrew Kupfer

MANAGING 131 HOW COMPANIES SPY ON EMPLOYEES Done right, monitoring performance by computer or telephone improves service, productivity, and profits. Done wrong, it just bugs the staff -- in both senses. by Gene Bylinsky

MANAGING 145 DEALING WITH SEXUAL HARASSMENT Smart companies are educating employees about what it is -- not always an easy call -- investigating allegations fast, protecting victims, and penalizing offenders. by Alan Deutschman

TECHNOLOGY 151 APPLE'S JAPANESE ALLY PowerBook 100, its new notebook computer made by Sony, shows why alliances are hot in the PC business. by Brenton R. Schlender

155 TECHNOLOGY TO WATCH The lightest man-made solid makes superb insulation, among other things. by David Kirkpatrick

MONEY & MARKETS 159 BANKERS WHO BEAT THE BUST In an industry shaken to its wing tips, these managers prosper. Their secrets: superior customer service, generous employee incentives, and knowing the local market. by Terence P. Pare

INNOVATION 168 PRODUCTS TO WATCH A sheet music database with 20,000 titles, computer bugs (the real thing), and more. by Alison Sprout

SELLING 172 LIQUOR PROFITS RUNNETH OVER We're drinking less, but the big liquor sellers are earning more. They understand global brand management and joint ventures so well that falling demand doesn't faze them. by Bill Saporito

DEPARTMENTS 4 EDITOR'S DESK 8 INDEX 12 NEWS/TRENDS Corporate write-offs pile up, B-schools quiz Japanese students, where the new jobs are, office woes East and West, IBM-Microsoft feud, and more.

21 FORTUNE FORECAST States' new policy of tax and don't spend gives little back to the economy. by Joseph Spiers

Economic Intelligence: A credit-crunch quiz, sticky gasoline, and who's buying those exports.

25 PERSONAL INVESTING Picking the stars of tomorrow from today's new stocks. by Terence P. Pare

Also: How to juice up your retirement income, where to put your rainy day money now, and Portfolio Talk with Harold A. Mackinney Jr., chairman of Fleet/ Norstar Investment Advisers.

47 LETTERS TO FORTUNE

199 FORTUNE PEOPLE Heinz's CEO weds a Greek heiress, an encore for IBM's Little Tramp, and more. by Andrew Erdman

201 OFFICE HOURS Is the boss-as-coach just a stalking-horse for a truly new concept -- the unleader? by Walter Kiechel III

205 BOOKS & IDEAS Don Petersen of Ford doesn't kiss and tell, but he also doesn't have much to say. by Alex Taylor III

207 KEEPING UP by Daniel Seligman

ABOVE: Lunchtime joggers at high-tech consortium MCC in Austin, the town with the most relaxed lifestyle of the top ten -- and the least expensive. Photograph by Robb Kendrick.

COVER: After exploring his options, CEO Kent Nelson moved UPS headquarters from Greenwich, Connecticut, to Atlanta, the top-ranked city on our list. Photographed by Robb Kendrick at Atlanta's airport.