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Jim Cramer outlined a plan for President-elect Barack Obama to fix the struggling economy on his "Mad Money" TV show Wednesday.

Cramer said the first steps to turn the economy around are unfortunately beyond our control. The European and Asian central banks must cut interest rates, he said, ahead of what is sure to be a awful unemployment number on Friday. Without it, the markets will undoubtedly be in for another significant slide.

As for what Barrack Obama can control, Cramer said the first step is to fix the ailing auto industry. He said a major federal bailout, similar to that of

AIG

(AIG) - Get Report

, will be needed.

The government should buy huge chunks of both common and preferred shares in

General Motors

(GM) - Get Report

,

Ford

(F) - Get Report

and

Chrysler

(C) - Get Report

to stabilize their stock prices and secure the companies' corporate debt until structural changes can be made.

Second, Obama needs to solve the country's energy independence problem. Cramer recommended relying on the U.S.'s huge reserves of natural gas to bridge the gap to renewable energy.

Obama, he said, should mandate the U.S. automakers to make natural gas vehicles and encourage the oil industry to use tax credits to open natural gas fueling stations. Natural gas, he said, is not only a quick solution but one that could create thousands of jobs.

Finally, Cramer said the country must fix the housing crisis. Cramer says the remaining $400 billion in the TARP program should be used to buy 1.3 million homes in the hardest hit areas of the country.

Cramer: Obama's Win Gives Us Two Markets

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The government then can offer these homes to Americans for low down payments and fixed 5% mortgages. He said this strategy will stop home price depreciation cold.

With these steps, Cramer said any president could easily fix the country's problems in his first 100 days.

A Treacherous Market

Cramer talked with David Novak, president, chairman and CEO of

Yum Brands

(YUM) - Get Report

, to see if owners of KFC, Taco Bell and Pizza Hut have what it takes to weather the tough economic storm.

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Yum! Brands last reported its earnings on Oct. 8, when it beat expectations by 4 cents a share with strong same-store sales growth. However, concerns over declining margins in China have sent the stock lower, where it now trades at just 14 times its earnings, despite its historical average of over 17 times earnings.

Novak said Yum! Brands has well established brands that are well positioned for this troubled economy. He said there are always challenges in the restaurant business, but his company is designed to weather the ups and downs.

Novak confirmed the declining margins in China amidst unprecedented food inflation, but emphasized the opportunities in China are still staggering. He said Yum! Brands will open 500 new stores in that country by year-end, taking it to a total of just 3,000 locations. This, he said, still equates to 2 stores per million people in China, compared to 60 stores per million here in the U.S.

When asked about political risks in countires like Russia, Novak said there are always risks when dealing overseas, but said Yum! continues to focus on its U.S., Chinese, and international divisions, with revenues from Russia adding to already strong sales.

When asked about opportunities domestically, Novak was also upbeat, noting several new products and initiatives for all of the company's chains.

Cramer said he's still a fan of Yum! Brands, but recommended waiting for the company's dividend yield to hit 3% before buying.

Future of Coal

Cramer also checked in with Jim Rogers, CEO of

Duke Energy

(DUK) - Get Report

, to discuss that company's recent disappointing quarter and the upcoming Obama administration.

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Rogers said it's his mission to provide his customers with affordable, reliable and clean power 24x7. He said Duke is already the country's third largest generator of electricity using nuclear power, and the company is making sizable investments in both wind and solar energy.

Regarding the company's costs and profitability, Rogers reminded viewers that 70% of Duke's operations are regulated, meaning that increased costs are absorbed by its customers.

He said the recent earnings shortfall was mainly due to storm-related costs from Hurricane Ike and increased mark-to-market costs associated with the company's hedging and not from operations.

Rogers also spoke about Duke's "Save-a-Watt" proposal, which promotes energy efficiency. Under the plan, utilities would be reimbursed for working with consumers to help create a more energy efficient environment in a new low-carbon world.

Cramer called Duke a smart company and a good play in the energy patch.

Am I Diversified?

Cramer talked with callers to see if their portfolios have what it takes. The first caller's portfolio included

ExxonMobil

(XOM) - Get Report

,

Google

(GOOG) - Get Report

,

Bank of America

(BAC) - Get Report

,

Target

(TGT) - Get Report

and

Coherent

(COHR) - Get Report

.

Cramer said "hallelujah" to this portfolio's plethora of diversified sectors.

The second caller's top holdings included

Unilever

(UL) - Get Report

,

Morgan Stanley

(MS) - Get Report

,

Celgene

(CELG) - Get Report

,

ConEd

(ED) - Get Report

and

Kraft

(KFT)

.

Cramer said Kraft and Unilever had too much overlap and one of the two must be sold.

The third caller had

Yamana Gold

(AUY) - Get Report

,

Boeing

(BA) - Get Report

,

BB&T

(BBT) - Get Report

,

Google

(GOOG) - Get Report

and

Boardwalk Pipeline

(BWP)

as their top five stocks.

Cramer blessed this portfolio, calling it the ideal IRA portfolio.

Lightning Round

Cramer was bullish on

Johnson & Johnson

(JNJ) - Get Report

,

Kinetic Concepts

(KCI)

and

Caterpillar

(CAT) - Get Report

.

Cramer was bearish on

Nokia

(NOK) - Get Report

,

Thermo Electron

(TMO) - Get Report

,

Hartford Financial Services

(HIG) - Get Report

and

Aecom Technology

(ACM) - Get Report

.

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.

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At the time of publication, Cramer was long Johnson & Johnson, Morgan Stanley, Celgene and Unilever.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com 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 TheStreet.com, 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 TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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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 TheStreet.com. 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 TheStreet.com, 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.