When: Friday, November 9 at 6:00 PM ET
Where: "Mad Money w/Jim Cramer"
The following is the unofficial transcript of a CNBC interview with Senator Chris Dodd on CNBC's "Mad Money w/Jim Cramer" today. All references must be sourced to CNBC.
In an interview with CNBC's Jim Cramer, Senator Dodd discusses energy policies and foreign oil, energy alternatives, the mortgage crisis and the economy, among other topics.JIM CRAMER
, host:I know the market's been, well, let's be polite, a little rocky lately. But I want to help you put it all into perspective. Don't just focus on what the market's doing now. Why don't you think about the Washington situation? Election day? Beyond? You need to be paying attention to politics because so often Wall Street is too focused on money and day-to-day trading and not the forces that decide how and where the big money gets spent, your tax dollars. That's why we get my information first-hand from the people who are campaigning rigorously to get to the White House next November.
Do you guys remember I spoke to Governor Mitt Romney about everything from the subprime crisis to trade barriers on China? Today we're going to go to the other side of the aisle with another presidential candidate with a keen sense of business. He's not only a member of the Senate Committee on Banking, Housing and Urban Affairs, he's also the chairman. He's got a great insight on energy, too. We've got to hit both these, right? With the energy--oil at 100, this man shares my passion for finance and for business, Senator Chris Dodd.
Senator Dodd, welcome to MAD MONEY.
Senator CHRIS DODD: Thank you, Jim, I'm a big fan of the show, so happy to be on here. First time, love it.
CRAMER: Thank you. All right, let me ask you something. I don't think anyone's got a better grip on energy policy. If you were president, would you go over to Saudi Arabia, which does have swing, does have some swing capacity, say, `Guys, everyone is being pained by you. Would you just please lower the price of oil right now?'
Sen. DODD: You have to in some ways here. And also, listen, independence is critical. We borrow a billion every single day to buy foreign oil. A billion dollars, every day, borrowed money to buy foreign oil. In my view, you've got to change that here. Our financial security, our national security, not to mention jobs, economic growth, directly linked to this. And we've got every opportunity in the world with the capacity, the capabilities, the technology, the ingenuity here to be weaning ourselves off that. Carbon is a major problem here, obviously, environmentally as well as healthwise. We ought to be figuring out a way to reduce our dependency on carbon-producing fuels. Utilize the technology we've got here, put people to work. So I'd certainly try to talk him down from the $100 down, but more importantly, I want to get off that dependency in that part of the world and that kind of oil anyway.
CRAMER: Senator, I went through your position papers, and you've got some great ideas about reducing carbon and reducing how much a car uses gasoline. I did not see something we have been going along with Green Week here on CNBC, I did not see a commitment to nuclear power. Is that not in your agenda?
Sen. DODD: No, it is. And you and I agree on this, and I mention it everywhere I go, you can't have an honest discussion about energy independence and dealing with a grid and talk about wind and solar and alternative ideas. You've got to have a better idea than that, and that's why I don't discount at all the importance of having a nuclear power energy source here, ones you can develop, I might add, internationally as well as at home.
Sen. DODD: Dealing with the problems of waste and transportation. That's got to be part of the mix. If you don't have it on the table as part of the mix, you're not being honest about this issue.
CRAMER: Well, for part of the--for the week, we had David Crane, who's the CEO of NRG, I think he's one of the most forward-looking energy CEOs, he is the only person who's gone to Washington and said, `Listen, we want to build a lot of nuke plants.' How do we get these CEOs of utility companies to recognize they'd better get off of coal and into nuclear?
Sen. DODD: Well, again, I think it's moving. I've got a sense out here, Jim, that people are changing their attitudes on this. There are some legitimate issues, I don't minimize them. But I get a real sense of the country here, as I go around campaigning for the presidency, that people understand this, they want to see us get back on this. And again, with the international consortium because it isn't just us. These developing countries, as well, can be talking about this energy source as a way to reduce the dependency on Hugo Chavez out of Venezuela...
Sen. DODD: ...who's obviously using oil as a way to get political support for his agenda. So there are a lot of good reasons why we ought to be developing this.
CRAMER: But you've got some great stuff about how cars have to be able to get more gasoline mileage. But we have GM and Ford on the ropes. Don't we want to preserve GM and Ford even if it means that we have to delay the CAFE standards?
Sen. DODD: Well, Jim, I happen to believe this is the only way you may preserve GM and Ford here. You know, in 1983, if you go back and look at the EPA mileage standards that existed 24 years ago, you had four cylinder and six cylinder automobiles in this country that were getting 44, 50, 55 miles per gallon. My wife bought a CRX in 1983 that got 43 miles to the gallon in the city. That was before cell phones and the personal computer. Now, you know, we ought to be able to get better mileage standards than we are. And in my view, if you do that, we can save that industry. If we don't, you're going to find that industry in deeper trouble, in my view.
CRAMER: OK. Let's switch gears because you're on this--you run the Senate banking committee
Sen. DODD: Right.
CRAMER: ...and you are, I think, the best guy in the Senate in terms of financial issues. One of the things that I'm concerned about locally, we've got a New York State general--attorney general, who's taking a national approach. He's really bashing Fannie Mae and Washington Mutual. They no doubt have made mistakes. There's no doubt in my mind. But right now, aren't we at a little bit of a precarious moment to start picking on the guys we need to make loans?
Sen. DODD: Absolutely. This is liquidity. Liquidity, liquidity. I hear back in August, I made the case. I think you made it as well. People tell me you did. When I had Ben Bernanke and Hank Paulson in the office in August to say, `Look, we've got to do something on this.' And I made the case then, lift these portfolio caps. You don't need legislation to do that. They have the power to regulate, and the president can make that happen. You need liquidity out there. We've got a liquidity crisis as well as a mortgage crisis. And if you start--by the way, Fannie and Freddie are the two vehicles that are available to us to really make a difference on liquidity. So I agree with you here. Let's not--the problems, you're right, in the past. That's over with here. Let's take advantage of what we've got in front of us and use it effectively.
CRAMER: Can you give me a sense--do we have any plan? Look, I feel that I'm not a partisan guy, but I've got to tell you something, I don't feel there's any plan at works to be able--I see this super structured vehicle thing that Paulson's working on. But there doesn't seem to be any behind-the-scene plan to make is to either the Federal Reserve can go in and buy $200 billion worth of these so-called collateralized debt obligations. Or no one even seems to have a disaster back-up resolution trust idea to be able to take care of homeowners. Why are we being so uncreative with this process?
Sen. DODD: Well, I think there's a resistance here about having government step in and do things like this. And I agree with you. We ought to be thinking about a back stop measures here. The market has taken care of a lot of this already. They have flushed out a lot of the bad operators and bad actions.
Sen. DODD: This is one of the reasons I'm running for the presidency here. Look, this is a $14 trillion economy. We need to have a leader in the country that not only understands foreign policy and how to put people back to work, but to manage and deal with this economy and having ideas that limit the kind of catastrophic problems we could have. There are people now predicting, Jim, that we may have a recession in 2008, that you haven't seen the last shoe fall with these major financial institutions. I hope that it's minimized, but we're not thinking about how to deal with this in a macro way, and that's deeply a problem.
CRAMER: I agree. Now listen, Senator, here's a tough one. I was a hedge fund manager for years. You have a lot of hedge funds in your home state of Connecticut including many guys I'm good friends with. I always felt that I should pay my fair share. Now I know there are people who have come to Washington and said, `Look, it's really going to hurt the financial markets if you tax my carrier--so called carriers,' which really was my bonus and cap anything other than capital gains. Senator, I am telling you that I paid it as ordinary income. I could not live with myself. I felt it was trickery. I know every American has the right to try to minimize their taxes, but that was my--that was my pay. That was my pay like everyone else in America. It was my ordinary income. Is this group really above ordinary income?
Sen. DODD: No, it's not, Jim, at all. But what I've said about this is, look, and I'm not even taking a position, in my view. Let's look, and I've asked the FCC and asked the treasury and others, what are the implications here regarding pensions, regarding endowments, regarding retirement accounts here? I want to make sure we're not doing more damage to a problem here than what we're creating or solving, rather, by dealing with the tax that this is ordinary income. I'm not opposed to that idea. I just want to make sure, as someone who's responsible at the end of the day, that what we're doing makes sense, it is right, that there aren't unintended consequences here that can cause more of a problem than the ones we're solving.
CRAMER: OK. One last question. On Wall Street, it's common parlance that if you elect a Democrat, it hurts the stock market. True or false?
Sen. DODD: False. You go back and look over the years. Democrats have been far better managers of the economy. The economy's done much better under Democratic management and control. That's one of the great myths of all time, here. We do much better here. Listen, I'm a pro-growth Democrat. I believe you ought to reward work, but you ought to reward risk as well. We're an entrepreneurial, we're an aspirational country here. We're dreamers. And you never want to undercut the importance of that aspirational quality of our nation here. So you need to be willing to take some chance, some risk here, you encourage that, support that. That's what I'll do as president.
CRAMER: All right. Senator Dodd. Thank you so much for coming on MAD MONEY.
Sen. DODD: You bet, Jim, thank you.
CRAMER: All right. Great to talk to you. Thank you very much. Senator Chris Dodd, man who understands banking and understands energy. We could a little more substance like that in the discourse. Stay with Cramer.
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