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Cramer's 'Mad Money' Recap: Giuliani Talks Economy

TheStreet.com Staff

Click here for an archive of Cramer's "Mad Money" recaps.

Jim Cramer went one-on-one with Republican presidential candidate Rudolph Giuliani in a "Mad Money" TV show special on Thursday.

With oil prices close to record highs, Cramer started the discussion asking Giuliani for his long-term approach to an energy policy. Giuliani said he supports anything that will make it possible for the U.S. to become energy independent, including moves to step up nuclear energy and energy exploration.

Asked if he would support imposing tariffs to get the money to become energy independent, Giuliani said he doesn't like tariffs. "They close us off to the rest of the world," he said, noting they are only well-employed when they are used as temporary incentives.

The U.S., Giuliani said, is virtually in control of nuclear power and should be making money on it. Further, "we have more coal reserves than Saudi Arabia has oil reserves," the former mayor pointed out.

The U.S. should increase its coal supply through government subsidies, and it needs to give oil corporations and other energy companies a chance to succeed.

Shifting to the housing crisis, Giuliani said he does not believe in specific bailouts for mortgage lenders. And he said taxes should be lowered, government spending should be curtailed and lenders should fix their own mess.

A decrease in government spending would restore confidence in the dollar, Giuliani explained. He also said higher taxes will not attract more investment money to the U.S. He said the U.S. has the highest corporate tax rate and it's not needed: "There's a strategy to tax reduction, it's called stimulating the economy."

The president has to impose spending caps on civilian agencies, Giuliani continued. "We have to get our spending under control."

The president's job is not only to be hands-on, but also to build coalitions, Giuliani said. When he was a U.S. Attorney, Giuliani said he was hands-on, but as mayor of New York he wasn't as much, except when dealing with the budget because "that's where priorities are reflected."

He said he succeeded in both posts because he had "really good people."

On the topic of being pro-growth and the gap between the rich and poor, Giuliani said he doesn't believe people should put a lid on growth to decrease the gap. Instead, they should increase education and job opportunities, he said.

Cash is Not King

Now that the market's been up a few days, Cramer told viewers it's time to change their strategy. There are always winners and losers when rates come down and "the most bearish position now is cash," he said. "Cash is no longer king."

Rates are coming down fast now, and people should want to run, not walk, from cash, Cramer said. "You should sell cash."

He said he's mostly talking about money-market savings accounts and CDs. A year from now, interest rates from banks and brokers will decrease significantly, and people should get out now, Cramer said.

The Fed might have to lower by a point or a point and half, and this will "crater" their cash yields, he emphasized.

Instead, home-gamers should move into high-growth stocks, he said. For investors looking for stability, Cramer suggested getting into preferred stocks, which he described as a special kind of stock that tends to have a higher dividend.

Sudden Death

During the "Sudden Death" round, Cramer was bullish on ABB (ABB Quote) and Freeport-McMoRan (FCX Quote), the latter of which he owns for his charitable trust, Action Alerts PLUS.

Cramer was bearish on Taseko Mines (TGB Quote) and Playboy Enterprises (PLA Quote).

Mad Mail

In his "Mad Mail" segment, Cramer expressed his dislike for Starbucks (SBUX Quote). The company, he said, hasn't had dramatic success in China, another reason it hasn't been able to reignite itself.

Responding to another email, Cramer said if Alcatel-Lucent (ALU Quote) CEO Patricia Russo gets fired, he'll think about recommending the stock, but not before then.

Lightning Round

Cramer was bullish on Tesoro (TSO Quote), Marathon Oil (MRO Quote), Shanda Interactive Entertainment (SNDA Quote), CBRL (CBRL Quote), Sirius Satellite Radio (SIRI Quote), McDonald's (MCD Quote), Dolby Laboratories (DLB Quote), Verizon (VZ Quote), AT&T (T Quote), Diana Shipping (DSX Quote) and UnitedHealth (UNH Quote).

Cramer was bearish on Volt Information Sciences (VOL Quote), Perfect World (PWRD Quote), Ambac (ABK Quote), PMI Group (PMI Quote), MGIC Investment (MTG Quote) and MBIA (MBI Quote).

Want more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here.

For more of Cramer's insights during the Lightning Round, click here.