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"If you want stocks to go higher, support the homeowner," Jim Cramer told a throng of students at the University of Iowa in a special "Back to School Tour" episode of his "Mad Money" TV show on Wednesday.

He said that if we solve the housing crisis, we will solve everything else.

Cramer painted a bleak outlook for the market after another 400-point loss for the

Dow Jones Industrial Average

. He said consumer spending looks like it's falling off a cliff after electronics retailer

Best Buy

(BBY) - Get Best Buy Co. Inc. Report

sharply cut its 2009 earnings outlook.

Treasury Secretary Henry Paulson didn't help after he said the $700 billion TARP program will be used to help bolster an ailing financial system instead of buying mortgage-related securities as originally intended.

"All of these issues come back to housing," said Cramer, who blamed the current economic mess on the 14 million people who took out bad loans. He said that if home prices keep falling, consumers will spend less, layoffs will get larger, and the government bailouts will continue as the market drifts ever lower.

Cramer said that cycle must be broken in order for the economy to recover. He had three suggestions. First, stop all new home building. Second, have the government buy up all of the vacant homes. And third, offer big tax credits to those buying homes.

Any, or all, of these steps, he said, will stop home price depreciation and get the markets back on track.

In the meantime, Cramer recommended buying only high-yielding dividend stocks, stocks trading at or near their cash value and recession-resistant companies.

He gave a nod to companies like


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Cramer: How to Play Google's Decline

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Last Ethanol Man Standing

When it comes to ethanol, Cramer made it no secret he's not a fan of the commodity, nor the companies that make it.

But with the collapse of

Verasun Energy

( VSUN), along with several other ethanol stocks, Cramer's changed his tune on

Archer Daniels Midland

(ADM) - Get Archer-Daniels-Midland Company Report


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Cramer said when all of the weak players get washed out of an industry, the last man standing usually wins. In this case, with just about all of the smaller ethanol companies now bought or bankrupt, ADM stands alone as a giant in the ethanol industry. Add that to an Obama presidency that heavily favors ethanol, and Cramer sees dollar signs.

Cramer said ADM is a huge buy based on its enormous size and global reach. He said in the biofuel business, size really does matter, and with its international business model, ADM is in the unique position of being able to shift its end product production to meet global demands.

For example, he said, now that ethanol is back in vogue in the U.S., ADM is shifting some of its corn syrup production back to ethanol to meet increased demand. Likewise, the company has the ability to weather disruptions in crop production by shifting supplies around the world.

Cramer said he's also a fan of ADM's bioplastics division, which makes bio-based plastics for plates, containers, utensils, coatings and other products.

When you put all of the pieces together, ADM is a buy, said Cramer.

Cramer's Take

Cramer gave his opinions on stocks pitched by student-run investment groups at University of Iowa.

The first stock was

Shire Pharmaceuticals

( SHPGY). Cramer said he likes the company and its drug pipeline, but he wanted to see its 2009 earnings estimates before he'd consider buying.

A second student pitched uranium provider


(CCJ) - Get Cameco Corporation Report

. With the price of uranium still dropping, Cramer thinks this company has little hope of recovering and sees only further declines for the stock.

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Lightning Round

Cramer was bearish on

Principal Financial Group

(PFG) - Get Principal Financial Group Inc Report


Yamana Gold

(AUY) - Get Yamana Gold Inc. (Canada) Report



(MTW) - Get Manitowoc Company Inc. (The) Report


Northrop Grumman

(NOC) - Get Northrop Grumman Corporation Report


Chicago Mercantile Exchange

(CME) - Get CME Group Inc. Report


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At the time of publication, Cramer was not long on any stock.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.