(FORTUNE Magazine) – THE ECONOMY/COVER STORIES 38 ARE YOU BETTER OFF? That question from an earlier campaign will haunt Bush this year. The short answer: You probably feel worse off than you are. Who truly has lost ground over the past dozen years? Education equals prosperity -- the less schooling you have, the farther you are likely to have fallen. by Lee Smith

46 GRIM TIMES IN NEW HAMPSHIRE MAY NOT HURT BUSH

52 AMERICA'S TOUGH NEW JOB MARKET Look for plenty of opportunity but less security. More people will work in small companies and at home. Those who get the good jobs will be skilled, adaptable, and able to keep learning. by Louis S. Richman

POLITICS & POLICY 63 WILL YOUR TAXES GET CUT IN 1992? Probably. The best bets are tax credits for the middle class, first-time homebuyers, and business investment. But hold the applause: The price may be a bigger budget deficit. by Rob Norton

SELLING 71 THE PRETTY PAYOFF IN CHEAP CHIC Hardly anyone wants to spend a fortune on clothes anymore, so big-name fashion designers are racing downscale to attract newly price-conscious customers. by Susan Caminiti

TECHNOLOGY 76 HOW SONY KEEPS THE MAGIC GOING Its engineers are the most prolific and innovative on the planet, turning out an average of four new products a day. One secret: Hire generalists and turn them loose. by Brenton R. Schlender

82 THE REAL GENIUS BEHIND SONY The unassuming inventor and founder is revered in Japan much as America admires Thomas Edison.

CORPORATE PERFORMANCE 88 BLACK & DECKER'S NEW SELLING TOOL: THE ACURA CONCEPT By abandoning its famous trademark, the company hopes to beat the Japanese. by Patricia Sellers

89 EQUIFAX: HOW TO SHINE IN A SULLIED INDUSTRY The top credit-reporting firm got a good-guy image by catering to consumers. by Laurie Kretchmar

CORPORATE PERFORMANCE 92 ALZA: GOT A GOOD IDEA? STICK WITH IT A ''Chicano with a green card'' profits from new methods of administering drugs. by Gene Bylinsky

93 COMPANIES TO WATCH California's BE Avionics delivers by outfitting the interiors of planes. by Shelley Neumeier

Also: Applebee's International and Bachman Information Systems.

MANAGING 94 MEET THE NEW REVOLUTIONARIES Five hot companies have shut out competitors by rewriting the rules of their industries. How they did so holds valuable strategic lessons for any manager. by Myron Magnet

INNOVATION 103 PRODUCTS TO WATCH A lower-calorie Milky Way, the first underwater 35-mm SLR camera, and more. by Alison L. Sprout

EXECUTIVE LIFE 104 MR. ROGERS TAKES HIS DREAM TRIP The successful money manager went on an adventure of the sort most people only fantasize about. Among his souvenirs: investments in such emerging nations as Botswana, Bolivia, and El Salvador.

108 ROGERS ON BRIBERY: HOW TO GET RIPPED OFF

110 WHAT TO BUY WHERE

DEPARTMENTS 4 EDITOR'S DESK 8 INDEX 10 NEWS/TRENDS Best American cities for stocks, what the troubling Tokyo market means to the U.S., endangered stock options, CEOs help alma maters, and more.

21 FORTUNE FORECAST With luck, the budget won't much harm an economy apt to rebound anyway. by Vivian Brownstein

Economic Intelligence: Recession benchmarks, who the rich are, and air travel has improved.

29 PERSONAL INVESTING Can drug stocks keep flying high? Yes, but only the best of them. by Shawn Tully

Also: Schlumberger is ready to rise, where to find 10% yields, and Portfolio Talk with Michael Sherman of Shearson Lehman Brothers.

35 LETTERS TO FORTUNE

111 FORTUNE PEOPLE A billionaire jettisoned, Frank Perdue skewered, and more. by Alan Farnham

112 BOOKS & IDEAS Ever wonder where humanity came from, where it's going, why communism failed, or what Hegel was all about? Dip into the intellectual waters of Francis & Fukuyama's new book. by Michael Novak

114 KEEPING UP A word from the government, searching for a certain Senator (or the great mustache mystery), and other matters. by Daniel Seligman

ABOVE: Terry Roberts, photographed in Fort Worth by Brian Smith, prospered in the Texas oil boom but is now unemployed.

COVER: Smith also took these representative shots: the Schwartz family of suburban Chicago, Su Obman (left) in a rundown neighborhood in Pittsburgh, and Terry Biddle in Elwood City, Pennsylvania.