When: Wednesday, February 27th at 6 PM ET
Where: CNBC's "Mad Money w/Jim Cramer"
Following is the unofficial transcript. All references must be sourced to CNBC.
JIM CRAMER, host: Hi, I'm Jim Cramer. Welcome to MAD MONEY. Welcome to Cramerica. Other people want to make friends, I just want to try to make you money. My job's not just to entertain but to educate you. So call me at 1-800-743-CNBC.
With the presidential primaries in the home stretch, the economy is increasingly becoming the central point of the debate. Today Senator Clinton held an economic summit in Ohio to tackle the financial challenges facing America. Senator Clinton has claimed to be the candidate of action rather than words, and says that she has the policies and experiences to rebuild the economy.
I'm all about action, so tonight I want to talk to Senator Hillary Clinton in her first interview after last night's debate.
Senator, welcome to MAD MONEY.
Senator HILLARY CLINTON: It's great to talk to you, Jim.
CRAMER: Thank you.
Oh, I've been following this housing area, and I've got to tell you, you were well ahead of the curve of this housing trouble. Do you think the president, the Treasury secretary, the Federal Reserve have done enough so the people who own and live in homes should feel any security? And is this problem going to go away with their plan or with your plan?
Sen. CLINTON: Well, Jim, I don't think they've done enough. And, you know, I have been talking about this for a long time because, obviously, if we don't stop the bleeding in the home market, particularly with the foreclosures because of subprime mortgages, the real downward spiral of, you know, new construction and sales, you know, I think we're just looking at a longer and deeper economic recession over the longer term. And so, from my perspective, we need to act, and act more boldly. And I've been calling for a moratorium on home foreclosures for 90 days. Let's treat this like it was a corporation that had to work out with its creditors how it's going to stay in business. A lot of these people can pay what they're paying now and maybe even a little bit more, but they can't go up $500, $600, $700. That's just impossible. And let's freeze these adjustable rate mortgages. You know, what I'm advocating would be voluntary.
You know, I went to Wall Street in early December, said `You guys have got to be part of the solution.' The president and, you know, Secretary Paulson, you know came forward with a few little steps, but not nearly enough. And now in the last week or so, they've started talking about a moratorium, which is something I've been advocating. We need bolder action and we need it now.
CRAMER: Senator, I'm from Wall Street. I got tell you, the idea that they're going to do anything other than try to improve their bottom lines is just wrong. That's not the way they play it. How about we unleash the FHA, meant for that. We take people who've been rejected from refinance applications, who live in their homes, not speculators, and we give them 30-year stretch-outs from the FHA. Wouldn't that be a better way than giving everybody $600 and a stimulus plan that doesn't solve the problem?
Sen. CLINTON: You know it would be, and I have also advocated that the FHA do exactly that. We have to raise its limits so that it can deal with the severity of the problem in a lot of markets that would otherwise be shut out of any kind of solution. But this is the kind of problem, Jim, that demands urgent action and everybody just kind of walking around while it gets worse.
I mean, inflation is up. You know that.
Sen. CLINTON: You look at the indicators. You know, I think we're headed for some really, you know, uncharted waters here that are going to be difficult to navigate unless we start dealing with this, you know, home market problem.
CRAMER: How about the fact that they have an incredible laissez faire attitude in government, that perhaps the people who got in trouble it's their own fault. Do you think luck's playing no role in some of these poor people's foreclosures?
Sen. CLINTON: Well, I'll tell you what. We know that that is exactly what happened. These exotic vehicles, what are they? The structured investment vehicles...
Sen. CLINTON: ...that even, you know, Alan Greenspan and Bernanke had to have explained to them. You know, people's mortgages often Shanghai or Berlin in some portfolio. Yeah, I mean this was totally unprecedented. And the key here now is to say, look, we're in a mess. Everybody's contributed something.
But if you listen to the people that I've talked to throughout Ohio, these are people who were, you know, in many instances misled. They were the subject of abusive, fraudulent lending practices. They were given overenthusiastic appraisals...
Sen. CLINTON: ...in order to support a higher interest rate. You know, you had all of these people with, you know, crazy things like prepayment penalties, all sorts of shenanigans between appraisers and, you know, brokers and lenders. I mean, come on, this was a scam from, you know, start to finish...
Sen. CLINTON: ...that has really impacted adversely--not just on the people getting foreclosed on. What about the guy living next door? He's paid off his mortgage, he's got a vacant house next door.
Sen. CLINTON: What about, you know, the communities that start to see all the consequences of that. So it's a problem that demands action. We're not getting it from our current president and administration.
CRAMER: No, not yet. Now, because you've been in the discussion about NAFTA, I have to tell you, I do a lot of work from the bottoms up with companies.
There's a $1/2 trillion in business that the two states--Ohio and Texas--are doing overseas. I, as someone who worries, bottoms up, about companies fear that any tinkering with NAFTA, any suspension of NAFTA will risk one of the greatest Renaissances we've ever had in this country, which is our American companies, Ohio and Texas, doing business overseas. Won't they shut us out if we walk away from NAFTA?
Sen. CLINTON: No, I don't think so, Jim, because, you know, there is an opt out provision in the agreement. I don't think that will be necessary. If you talk to people from Mexico and Canada, they have their complaints as well.
You know, this has been the books now for 14 years. Times have changed. We need to take a hard look, see how it can be improved and fixed. That's what I am proposing. You know, obviously, we've got parts of our economy in every state that are thriving, and we've got many places that have really been neglected and left behind. So the key here is how do we have balanced growth, shared prosperity, get everybody back into the, you know, jobs, you know, possibilities that are out there. And I think we can do that. I think we can be smart about it.
CRAMER: Senator, you mention inflation. Half of inflation's coming from oil, the other half is coming from food. Do you believe that we should continue to burn food in this country? Poor people cannot afford what we're doing with our ethanol strategy. We're raising the price of the staples that they eat.
If we scrapped ethanol, half of our inflation would go away. Why are we allowing the ethanol lobby to destroy the affordability of people who want to eat chicken and beef?
Sen. CLINTON: Well, I think it's a little more complicated, Jim, because I think the increase in the energy prices generally have contributed to food inflation, although you're absolutely right that, you know, the rising cost of corn and soybeans, which are--you know, ubiquitous in our food supply, have certainly, you know, contributed significantly. But we're in a transition period. We need an energy policy that does focus on home grown energy. And that has to be a broad-based set of energy alternatives. You know, ethanol from corn is not the most efficient way to produce it, but it's what we're doing now as we move towards cellulosic, as we look at how we're going to, you know, incentivize wind and solar, and you know, I think we should be looking much more at new forms of energy for our cars. You know, the internal combustion engine looks pretty much the same as it looks when Henry Ford, you know...
Sen. CLINTON: ...rolled it out. What are we going to do to have more hybrids, more electric plug-ins? So this, I view, is kind of a transition period.
Sen. CLINTON: But it's important to get our plow in the ground so that we can figure out how we're going to work our way out of our dependence on both foreign oil and carbon-based fuels.
CRAMER: Senator, one last question. Are you going to eliminate the good, creative, I believe, low taxes on dividends on stocks if you become president?
Sen. CLINTON: Well, I have said that we might see some increase, but nothing significant there. I'm not talking about doing anything that undermines our investments, and keeps the markets moving, because especially if we have a recession in 2009, you know, we're going to have to be very careful about what we do. I have said that the upper end tax, you know, income on people over $250,000 a year will revert back to the, you know, the brackets we had in the 90s. I think that's affordable, I think that's understandable, and will make a big difference. I will use that money to help fund universal health care, which over the next couple of years if we phase that in, Jim, will bring down costs and get us off of this double digit increase in health care costs, which we just can't afford.
CRAMER: No, we can't. Thank you very much, Senator Clinton, for speaking on Mad Money.
Sen. CLINTON: Great to talk to you, Jim.
CRAMER: Excellent. Thank you.
Stay tuned. After the break, I'm going to teach you how to invest like a pro.
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