Cramer's 'Mad Money' Recap: Nov. 14

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What would the economy look like if the government allows General Motors (GM Quote) to fail? Jim Cramer pondered that very question on his "Mad Money" TV show Friday.

Cramer said it's no secret GM is borrowing billions of dollars that it doesn't have the ability to repay. And it's no secret that things at the company are getting worse by the day. But the economic consequences of a GM failure would be staggering, said Cramer.

GM and its suppliers employ millions of Americans, said Cramer. The resulting mass surge in unemployment if GM failed would be felt immediately by the two-thirds of the U.S. economy that depends on consumer spending. Cramer predicted the impact would translate to another 2,000-point drop in the Dow. General Motors, he said, would have double the impact of the Lehman Brothers collapse.

Cramer said he's not sure which way the federal government will go with General Motors, but until then, he sees two options: Sit on the sidelines and wait, or sell ahead of the news. He said investors simply can't buy into the markets unless they're sure GM will be saved.

"If GM is saved," said Cramer, "only then would I be a bull." He said that if GM were left to fail, he'd be a buyer only after his predicted 2,000 point free fall.

Cramer and Cutler

Cramer talked with Sandy Cutler, chairman and CEO of power management company Eaton (ETN Quote), a stock he owns for his charitable trust Action Alerts PLUS, to find out if this pick has what it takes to weather the looming recession.