Jim Cramer Speaks with Governor Mitt Romney on "Mad Money w/Jim Cramer" (Transcript Included)
WHEN: Friday, October 26 at 6:00PM ET
WHERE: "Mad Money W/Jim Cramer"
The following is the unofficial transcript of a CNBC interview with Governor Mitt Romney on CNBC's "Mad Money w/Jim Cramer" today. All references must be sourced to CNBC.
In the interview with CNBC's Jim Cramer, Governor Romney discusses the 2008 presidential election, his professional background, the state of the economy, oil prices and alternatvie energy, housing, taxes, free trade and China, among other topics.
Interview: Former Governor Mitt Romney
JIM CRAMER, host: Twenty-three years ago, I was casting about, trying to figure out what the heck to do with my life. I'd gone to Harvard Law School and couldn't make up my mind whether I wanted to be a federal prosecutor to put the bad guys away or a consultant, one of those high-powered guys who came in to fix a company or advise what to do with it, or perhaps a broker at an investment house, preferably at Goldman Sachs.
All right, ultimately, two men determined that I was headed to Goldman. Neither worked at Goldman Sachs. And more important, both are running for president this year from the Republican Party. The first man who influenced me is Rudy Giuliani. He rejected me when I applied to work in the work in the prestigious Southern District of Manhattan, the office that prosecutes the bad guys who wear white collars, the guys who do insider trading and security...(unintelligible)...violators. He wanted only people on law review, he could pick and choose.
And then there was the second man, the man I'm about to bring on, who perhaps more than any recruiter I ever met influenced me toward a new career. That man's name is Mitt Romney. He was working at Bain at the time, the top consulting company in the country. And he saw down with me. Not that he would ever remember, and grilled me about what I could bring to the Bain party. He quizzed me about going around the globe fixing companies worldwide and about how I could assess companies on returns, on equity returns on investments...(unintelligible)...the earnings stream, how earnings could be augmented. Synergy. I listened as he asked in his intense, eye-piercing way, rattling off questions like a Gatling gun, asked me perhaps the most difficult inquiries I've ever been grilled about. At the end of the meeting, I'd made up my mind. The guy was just too darn smart and demanding, too way ahead of me, too rigorous a businessman for Cramer! I was, in a word, intimidated!
I'm trying to think about another time in my life that I've ever had that experience. Anyway, he made my mind up. I was going, not to Bain, but to Goldman. That's why I had no problem when I was on "Chris Matthews Show" recently and called him perhaps the best businessman in the country. It was personal experience. Now, the quote's been enshrined in the businessman's ad, caused me some grief, and I must add amusement, because I didn't mean it as an endorsement for anyone for president. I just meant to tell the truth about his rigor, acumen and ability.
My job is to make you money. So why am I interviewing a presidential candidate, never done before on CRAMERICA here? Because sometimes it's not what's happening on Wall Street but what's happening on Pennsylvania Avenue or the road to it that could make you MAD MONEY! So it's with great privilege I bring on the only man who has ever stumped me about business, Governor Mitt Romney.
Governor, good to have you on MAD MONEY.
Governor MITT ROMNEY: Thank you, Cramer. Good to be with you after all these years. And now it's your turn to interview me rather than my time to interview you.
CRAMER: Oh, I don't know. I'm still a tad intimidated because I just know--it really was funny. It was in a class that you came, that you interviewed me, and it was one of those things where everyone wanted to be at your company, including myself. I just didn't know that you would actually have to be kind of pretty brilliant about business and I was just very impressed with what you were doing, and I still am now, to play my cards openly.
Let me ask you something. You're running as a business president. I've seen something--I do this college tour, and I've seen something that's pretty amazing about it. The people in their 20s and their 30s in this country, now revere business, respect what business people do, and I think are inclined to want to talk openly about making money and I think would embrace a candidate like you because you've made a lot of money. Are you seeing the same thing on your campaign trail?
Gov. ROMNEY: You know, I do think people want to have individuals who are not lifelong politicians, but folks who know how to solve tough problems. And you know, if you've been in the consulting world or the investment world, you learn how to look at a tough situation, get people to come together, analyze it, take it apart to figure out the right direction. And frankly, our country needs to have some smart people with private sector experience, business experience, to look at the problems we have here and around the world and solve them, to get the job done. We're tired of all the talk, we want to get somebody who can get the job done.
CRAMER: But Governor, President Bush ran as the CEO president. We--I think in America, have kind of felt that maybe that was something that was a slogan but not reality. Are you the CEO president 2.0?
Gov. ROMNEY: Well, we certainly have different histories. My life was spent, as you point out, in the consulting world for 10 years, and then in the investment world. And as you know personally, investing is tough, and doing well in investing and helping manage business is not easy. Then I went off and ran the Olympic Games and got them turned around, then I've been a governor for four years, and worked together with the legislature to get that turned around. So it's a different experience mix. I'm not the same as President Bush. He's a great leader in his own way, and I bring a little different perspective. But 25 years in the private sector has taught me that if you're going to run something, it's helpful to have run something before.
CRAMER: All right, look, you are a great investor, and it's not just Staples. You've done a lot of companies that we have gone, like this on...(mooing sound). Why is our country's stock market among the three or four worst in the globe over the last five years? What--why is that?
Gov. ROMNEY: Well, I must admit, I spend very little time worrying about when I was an investor, worrying about how the overall market was going to do. I worried instead about which companies were going to be successful and which ones were not going to be. But there's no question but there's a failure in our country to deal with the long-term economic problems we have, the long-term overspending in Washington, the overuse of foreign oil, that puts a damper on our entire economy, and we're going to finally have to deal with those things.
CRAMER: All right. But look, foreign oil, I hear you, but in the end, we're out of oil in this country. I talked to every single oil drilling company that is a major company. You know, I'm talking about Schlumberger, Halliburton, Baker Hughes. They all want to leave this country because there's not enough left. At the same time, before Monsanto can--and Deere can ramp up this nation, there's a gap. Is the gap to be filled by trying to have clean coal? Is the gap to be filled by natural gas? What's your suggestion for the gap that is going to exist for the next 10 years?
Gov. ROMNEY: Well, one is that I want to have the federal government participate, along with private enterprise, to pursue all the avenues that we have for additional energy, and that is more gas, it is also liquified coal, clean burning coal, more nuclear power, as well as more drilling, outer continental shelf as well as at ANWR, so we can develop more sources of our own. And perhaps the greatest way to improve our energy equation is by reducing our use of energy through higher efficiency. That means cars, homes, businesses that are more efficient. If we actually get on a track to become energy independent, and that'll take, what, 20 years, if we get on that track, that's going to have an impact on oil prices around the world, and it's going to strengthen our economic vitality long-term. Because right now, we're spending a billion dollars a day buying oil from other people and that makes no sense.
CRAMER: None at all. OK, look, one of the things that we've been focusing on on MAD MONEY is that we believe that there is a housing crisis. We fear that there could be--14 million people bought homes between 2005 and 2007, seven million of them took exotic mortgages that are now resetting. A lot of people from your party think tough luck, they went to the wrong casino. Is it right to believe that the government should not have a hand in trying to restore the faith of American home buyers who literally believed in the American dream, in part because the Republican Party promoted it?
Gov. ROMNEY: You know, we have a government agency in Washington known as OFEO that's responsible to make sure that we don't have products being foisted on the public that don't work. They weren't doing their jobs. And frankly,some people there ought to be fired rather than given raises. And in my view, it is appropriate for the federal government to do, as President Bush has indicated, which is to refinance some of these loans on a permanent basis where people are able to meet their obligations. It's in no one's interest to have these things reset in a way people can't afford. Now, I'm not going to lose a lot of sleep over investors who bought some of the mortgage products and paid too much and didn't recognize the extent of the risk. But I am going to lose sleep over homeowners who didn't realize thattheir rates were going to go through the roof, and I think in those cases, we've got to go back and help refinance those loans so we don't have the glut of housing drop onto the market.
CRAMER: All right. I think that's a great plan. It's what I've been pushing on my show.
I want to talk about something I talked about with Tim Russert recently, which is that I'm a free trader. I took the same courses you did. I know what--I know as a business person, how great free trade is. But it's got to be also fair. In my experience, when you were in business, when I was running my hedge fund, the Japanese were taking advantage of America, they were beating us everywhere, they were taking our jobs, we made a stand. Now, Toyota's the largest big industrial company hiring in our country. The Japanese built plants everywhere, including in areas of big unemployment. Now, China. We just know China is just sucking the daylights out of our jobs. The current administration, they're talking tough. How do we get the Chinese to build plants here and sink money in our country and not just take our money and also pirate our products?
Gov. ROMNEY: Well, you hit the nail on the head with that last line as well, pirating our products. You really can't have a relationship with another country, exchanging goods, without make sure that the playing field is level. And we just haven't done that. They've pegged their currency to ours in a way that makes their products artificially lower priced. They're also able to refund their taxes, whereas our taxes are embedded in our products, and therefore, our products look more expensive. And they don't protect our intellectual property rights, our designs, our patents, and as a result, companies who make these products are finding themselves at a disadvantage around the world, and particularly in China where they sell them. So we're going to have to enter into agreements with nations that are willing to abide by the kind of standards that you'd expect of a fair trading partner.
You know, there's something known as deal fever in the business I used to be in, which is sign an agreement at any cost. I don't agree with that. We have make sure that when we sign agreements with other nations for trade, they're fair for us, not just fair for them.
CRAMER: Now, would you ever put a tariff on Chinese products across the board in order to show them that we meant business?
Gov. ROMNEY: Well, you know, in a negotiation, you never tell the other side what you're willing to do. I don't like tariffs. I don't like putting barriers up. I don't want to stop the trade that we have between ourselves and other nations. But you have to be able to walk away from the table if other people are taking advantage of you, and in the current circumstances, the Chinese are taking advantage of intellectual property rights, obviously safety standards they're not following, and pegging their currency as they are, and obviously, Secretary Hank Paulison is working hard to change those things. But we need to see progress or get tougher.
CRAMER: All right. One of the things that you have been noted for, you've been a great tax cutter, which has worked. Are there situations where you could see it on some vice, perhaps, or it's some way to be able to help the energy situation, that you would actually favor a tax or a higher tax than we currently have?
Gov. ROMNEY: You know, when you open that door, you end up saying, `Katie, bar the door.' The Democrats, like Hillary Clinton, want to put in place a new Social Security tax, they want higher income taxes, higher taxes on capital gains, dividends and interest. Charlie Rangel just came out this week saying he wants to put a surcharge on taxes, largest increase in the history of America. Look, more taxes are what the Democrats have in mind to fund many of Hillary Clinton's million good ideas. We can't afford that. It would slow down the economy, it would kill job creation in this country. The right answer is always to keep taxes down. Don't add new taxes, but instead allow the American people and the entrepreneurial spirit to grow our economy. That's the best way to get revenues for government and the best ways to get good jobs for our people.
CRAMER: One last question. You were basically a fund manager like I was, I always felt that I--even though I was making millions of dollars, I should pay my fair share. I don't like what some of these hedge funds want to get away with now, paying less than their fair share. Do you think that on that so-called carry that you had on your bonus, that you should pay taxes, pay taxes like all the rest of the hard-working Americans, or do you think you deserve privileged treatment because you're helping some pension fund?
Gov. ROMNEY: No. I actually think that if people are making capital gains investments, they ought to get capital gains returns. And so I'm not in favor of changing something from a capital gain to being ordinary income, just because people think they can raise a lot of tax money. I don't want to see these funds decide to get out of our country, stop investing here, or to restructure their deals to avoid taxes. It's a capital gains and I'd continue to treat it that way.
CRAMER: OK. That's Governor Mitt Romney, running for president from the Republican Party. Thank you so much, sir.
Gov. ROMNEY: Thanks, Jim. Good to be with you.
CRAMER: All right. MAD MONEY will be right back.
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