Is CNBC's Jim Cramer Trying to Scare Main Street?

This is a rush transcript from "America's Election HQ," October 7, 2008. This copy may not be in its final form and may be updated.

BILL HEMMER, HOST: In the meantime, another day and another hit on Wall Street. The Dow dropping 508 points at the close. This after a day after it fell about 350 — just yesterday.

Meanwhile, former Lehman Brothers' CEO, Richard Fuld, was hit with some tough questions at a House committee hearing yesterday. And that was nothing compared to what he faced last month. As Lehman was falling apart, Fuld was reportedly punched in the face while at the gym. A witness claims Fuld was running on the treadmill when someone walked over and knocked him out cold.

Another people were given a less violent way to vent their anger. A Brooklyn artist painted a portrait of Fuld, brought it to Lehman headquarters, and allowed bystanders and employees to write all over. After two days, it was covered with comments like, "blood suckers," "See you at the soup kitchen," and, "You are a coward."

And talk about a bonus, as insurance giant, AIG, was benefiting from the government's loan for help, executives from the firm enjoyed a retreat at a luxury resort to the tune of almost $500,000 including $23,000 in spa charges. Congress is said to be looking into that.

Video: Watch Bill Hemmer's interview

Meanwhile, people are worried about their money and for good reason. And some are wondering if comments like the following from CNBC's Jim Cramer and the "Today Show," today and yesterday are helping matters. This is from this morning.

(BEGIN VIDEO CLIP, NBC 'TODAY SHOW')

JIM CRAMER, CNBC: Whatever you may need for the next five years, please, take it out of the stock market right now, this week. I do not believe that you should risk those assets in the stock market.

(END VIDEO CLIP)

HEMMER: I checked that, that was from today. He came back for a repeat performance to clarify his remarks. And again, today saying that if you want money for college, essentially or an auto loan or a home loan, the stock market for about the next five years is not the place to be.

Personal finance expert and host of "The Dave Ramsey Show" on the FOX Business Network, Dave Ramsey is with us tonight.

How are you, Dave? Before we talk about Cramer...

DAVE RAMSEY, "THE DAVE RAMSEY SHOW": I'm better than I deserve. How are you?

HEMMER: I'm fine. Thank you. Talk us off the ledge here — 508 after a day we were down 350. What's happening?

RAMSEY: Well, you know, when you start watching the stock market on a daily basis, it's traded by basically bipolar people. They either sitting in the corner sucking their thumb and freaking out or they're having a celebration. One of the two.

You cannot follow the stock market on a daily basis. It runs on emotion on a daily basis. It runs on math on an annual or on a decade basis. And so, what Jim was saying was right, in that Jim is a very smart guy. It sounded a little bit doom and gloom, but really, 97 percent of the five-year period in the stock market's history made money.

So, you shouldn't ever put money on a mutual fund or in the stock market in any way unless you're going to leave it alone five years. One hundred percent of the 10-year periods have made money. So, we're going to be fine. It's just going to take a little while and it's kind of crazy right now.

HEMMER: So, you agree with Cramer? You don't have a problem with what he said?

RAMSEY: Well, you should — I would have told you the exact same thing two years ago or five years ago, or 10 years ago.

HEMMER: What — the sky is falling?

RAMSEY: You should never put money in the market that you're not going to leave alone at least five years. When you're jumping in and out of market, there are all kinds of studies that show you lose your butt. The difference is that Jim does a show where he buys and sells stocks on another network. And it's very entertaining.

But I don't recommend buying and selling stocks. I have a principle that we use that we invest in good growth stock mutual funds with long track records and I forget I own it. I have not pulled a dime out during this time and I steadily invested the exact same amount that I was before all this mess started.

HEMMER: Is that right, huh?

Well, what the government is doing right now is they're trying some new ideas, some novel ideas. The rescue bill is one idea that I know you got some mixed feelings about, but this whole idea today about the Fed loaning money directly to companies, do you like that idea?

RAMSEY: Well, I don't have any mixed feelings about any of it at all. It's freaking socialism, it's what it is. And they're getting ready to hand the whole thing over to Barack Obama and it's going to go even further. So, it's — the free markets have been totally interrupted by the government here.

And I know they're good people trying to do good things, but they're doing it in a bad way. And they need to step back and let the bleeding finish. And then we're going to get back to solid ground and go again. We always have. There's all kinds of track records of this stuff.

The stock market has lost more than 10 percent 10 times since 1970. It returned every bit of that within two years, nine of those 10 times, and the year following the bottom of the market averages a 33 percent rate of return.

HEMMER: So, you're not changing anything, are you?

RAMSEY: I'm not changing a thing. It's what I've always done and I'm going to keep doing it. I still believe that Microsoft and Google and McDonald's and General Motors and Ford and on and on and on — Wal-Mart — and those companies aren't worth 20 percent less right now than they were this time last year. That's bogus. And so, they will come back. The American economy has not collapsed.

HEMMER: I'm off the ledge now, Dave.

(LAUGHTER)

HEMMER: Thank you. You did your job. As always...

RAMSEY: That's all what I'm here for, Bill.

HEMMER: I say that with sarcasm. Thank you, Dave Ramsey.

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