InvestorCanada.com Interview

CNBC's Jim Cramer Talks Politics

It's an election year and traditionally, that means a winning year on the markets, but if President Bush remains in the White House, he may be in for some trouble says TheStreet.com Co-Founder Jim Cramer

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Transcript

GRAHAM: It’s an election year in the United States, traditionally a winning time on stock markets.

But should investors be worried this time around? Is US President George W. Bush and Republicans in trouble? You may want to turn up the volume for our next guest.

He’s a bit shy, soft-spoken.

Joining us from New York, the co-founder of TheStreet.com and co-host of CNBC’s Kudloe and Cramer, Jim Cramer. Mr. Cramer, welcome to the program.

CRAMER: Oh, thank you, Rob. A pleasure to be here.

GRAHAM: The view from up here, Jim, is that George W. Bush is in for quite a fight to stay in the White House. Is that an accurate view and if so, from an investing point of view, is it a troubling view?

CRAMER: I’m going to say yes to both of those. I think he is in trouble and I think that it could be trouble for the market because there is one thing that Bush has done and done well, which is make it so that if you’re rich, you should put your money in the stock market because you just get great tax breaks.

You get great tax breaks from dividends, great capital gains tax breaks, and that’s something that most people who aren’t rich can’t really take advantage of. And that environment will definitely change if Senator Kerry gets in.

GRAHAM: If the Democrats do take office, how will the markets react? I know there’s always the initial knee-jerk reaction.

They will probably pull back a little bit, but over the long haul, would the landscape really change that much for investors?

CRAMER: No, I don’t think so but I think that it’s the devil you don’t know.

I think that what would happen is people would say well, Kerry is going to come in and with guns blazing against the pharmaceuticals, maybe rewrite some of the medicare bill which was basically written by the drug companies.

Maybe he will create some distance and raise capital gains so that you would want to sell stock now because the capital gains rate is going to go up.

I envision those things occurring. I am a Democrat though and feel that Kerry would in the end surprise you and be a lot more like Clinton, which was a fabulous time to own stocks.

GRAHAM: Why is Bush having such a hard time in trying to convince Americans that the labour market is improving? That appears to be the real thorn in his backside.

CRAMER: Indeed. Well, first of all, he has no touch, like his father. I just don’t feel that while Bush seems like a regular guy, he doesn’t seem to have regular guy friends.

He doesn’t seem as sympathetic given that his policies have all been cut tax, cut tax, cut tax and it didn’t necessarily produce the job boom, people are saying well, you know, all we did was just make it so that rich people had a better ride.

That’s not enough and I sense that there is a lot of anger about that.

GRAHAM: Yes, a lot of the stats that have been coming out appear to indicate that the economy is certainly n the right track and it’s moving in the right direction. There were some encouraging comments from Fed Chairman Greenspan earlier in the week. But it seems that this message is having a tough time filtering down to the guy on the street.

CRAMER: Well, a lot of people seem to think that the President can really do something about job growth and the President’s pretty much done everything.

The rates are low and the capital gain rate, so he’s kind of done everything he can do and it’s still not working.

Then you have this new resonant theme which is this outsourcing. You know frankly again, I’m a free trader and I like open borders and I think Bush has done a good job on this, but we’re not producing jobs.

In a way the Democrats have kind of set the debate. Even though we have really good GDP growth, even though we’ve got really good order growth, even though we’ve got a lot of stocks, at a 52-week high, it’s not enough and that seems to be working with the American people who seem very puzzled.

And Bush doesn’t seem to be able to tell a good story about why it hasn’t happened yet.

GRAHAM: Keep those borders open because as you know, Jim, 85 percent of our products made in Canada end up in the United States so we need you guys to keep the traffic flowing.

CRAMER: Well, let me tell you something. I have kids and one is about to be a teenager and I think a lot of people in my situation feel like we are people who travel, we’re people who want our kids to go overseas, see the world, go to Canada, go to Europe.

We’re troubled by the fact that we think that our President has made a lot of countries and a lot of people hate us.

And you know, I go to Canada every year and I feel very strongly that for the first time in my life, that the Canadians aren’t welcoming me with open arms because of our President.

I feel the same way about Europe and it’s just something, it’s an intangible that makes a lot of people very uncomfortable. I don’t think I would want my kids to get in trouble overseas with this President because it just seems to be he’s turned off a lot of people. A lot of people really historically liked us.

GRAHAM: Yes.

CRAMER: It bugs the heck out of me.

GRAHAM: You’re not being welcomed by open arms up here because of anything you might have said on TV?

CRAMER: No, I’ve always felt very at home in Canada. I go up there for a vacation. I just actually just started planning my Toronto fall trip.

I just happen to like Canada very much, as does my family, but I just saw that the Canadians, when they came to the Iraq War, they weren’t with us and the Canadians are with us all the time because they’re our best friends and I think that we changed that and it just really does bug me.

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