Cramer's 'Mad Money' Recap: One on One With Clinton

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"People are always wondering if a Democrat in the White House will be bad for Wall Street," Jim Cramer told viewers of his "Mad Money" TV show Wednesday.

With that introduction, he welcomed New York Sen. and presidential hopeful Hillary Clinton to the show to discuss a number of economic and political issues.

Cramer: Paulson Plan Is Hooey

In response to the sub-prime mortgage crisis, Clinton advocated giving regulatory agencies such as the Securities and Exchange Commission greater enforcement powers.

Clinton also said the Federal Reserve needs additional oversight authority to navigate the "dangerous and choppy" waters of a troubled economy.

She went on to criticize the Bush Administration for not responding to the sub-prime crisis sooner. "It's a new world where we need to have more oversight and transparency," she said. "We need to have a different attitude and ask the tough questions."

Cramer asked Clinton to comment on what the federal government can do to help promote jobs. Clinton said the research and development tax credit needs to become permanent and should even be doubled to encourage investment.

She advocated stopping federal subsidies to companies that don't need it, such as the oil and gas industry, and instead directing that money to a new, strategic approach towards energy independence.

She also told Cramer that she supports increased drilling for oil and natural gas, "where appropriate."

Returning to the housing crisis, Clinton supported a plan to use the Federal Housing Administration to secure loans for low-income homeowners. She also said penalties should not be imposed on homeowners who use their 401k and retirement savings to help save their homes from foreclosure.

New King of Coal

Cramer admitted he was wrong on his Dec. 6 recommendation to sell the coal stocks in favor of other energy alternatives.

For a new perspective on the industry, he welcomed Steven Leer, chairman and CEO of Arch Coal ACI, to the show.

Leer agreed with Cramer that while ethanol has made many advancements in recent years, it is not the right fuel for the country. He reminded viewers that more than 50% of U.S. energy comes from coal and that demand for coal is on the rise as coal technology advances.

Leer said that he is not worried about having a Democrat in the White House. "Coal is the most economic choice of energy for this country," he said. "It would be impossible for the US to stop using coal."

Cramer credited Leer with being a great spokesman for his industry, saying Arch Coal is the way to play energy in the coming year. "Coal's been given new life, and Arch Coal is the play," he said.

Am I Diversified?

In this segment Cramer took calls from viewers and commented on their portfolios. The first caller's portfolio included Chattem CHTT, Altria MO, Phillip Morris PM, Millicom MICC and CVRD RIO.

Cramer liked all of the stocks, but he advised against having both a domestic and international tobacco play in one portfolio. He advised selling Altria in favor of the new Phillip Morris International.

The second caller's top holdings included Rite-Aid RAD, Alcatel-Lucent AL, Kellogg K, Heinz HNZ and Verizon VZ.

Cramer flagged both Kellogg and Heinz as two of a kind. He also didn't like Alcatel-Lucent. He recommended adding a financial stock and a defense contractor.

The third caller's portfolio included BHP Billiton BHP, Halliburton HAL, Verizon VZ, Delta Petroleum DPTR and Korean Electric Power KEP.

Cramer blessed this portfolio.

Mad Mail

In the "Mad Mail" viewer feedback segment, a viewer asked if Medco Health Systems MHS will rise on news of a new partnership in Sweden. Cramer said that Medco trades on competition fears and drugs coming off of patents, not usually on its partnerships.