This is a rush transcript from "Your World With Neil Cavuto," October 28, 2008. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: All right. Well, despite today's rally, times are generally tough, but Martha Stewart weathering the storm handily. Martha Stewart Living Omnimedia did cut its profit outlook for the year, due mainly to weakness in the publishing business. I think my parent company knows a thing or two about that.

(LAUGHTER)

CAVUTO: But profits for Martha's merchandise, that was very strong. It more than doubled in the latest quarter, helped by deals with the likes of Emeril Lagasse, and Macy's, Wal-Mart.

With us now, company founder Martha Stewart. And wouldn't you know she just brought some chachkas with her. That's so unusual.

MARTHA STEWART, FOUNDER, MARTHA STEWART LIVING OMNIMEDIA: Well, more than chachkas. I brought you a ham.

(LAUGHTER)

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CAVUTO: That is not surviving here. The guys are already dibs on it. but, guys, I am closest to it.

(LAUGHTER)

CAVUTO: So, end of story.

(LAUGHTER)

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CAVUTO: So, it's interesting. In tough times, I bet this stuff actually does better.

STEWART: Well, it sells very well. I am on a book tour right now. So, I have been going into many cities with my newest book, which is "Martha Stewart's Cooking School."

We have had a phenomenal turnout at the book signings, and people thanking me...

CAVUTO: How many books have you written?

STEWART: Well, we have published -- Martha Stewart Living has published, under my name, 66 books. And I personally have written, I think -- I think this is the 33rd, something like that, a lot books.

(CROSSTALK)

CAVUTO: ... Stephen King every down moment?

STEWART: Oh, up in the attic at night...

CAVUTO: Right. Right.

STEWART: ... with the oil burning, yes.

But, no, this is a really good book. And it is apropos to the times, because it is refreshing your cooking skills. It is teaching you cooking skills, so that you can make, on your budget, a decent, delicious, nutritious meal.

CAVUTO: Well, that -- one of your strengths has been appealing to people in all price points...

STEWART: Yes.

CAVUTO: ... from the Wal-Mart...

(CROSSTALK)

STEWART: Yes.

CAVUTO: ... and all the way up.

How is that working out, because we're hearing, up the food chain, it's hurting?

STEWART: It's working well.

Well, right now, most of our product is sold at a wonderful store called Macy's. And, so, we have a huge -- we have about 4,000 (INAUDIBLE) at Macy's. Now, we are selling an awful lot there. And our sales are holding up. We're -- our product is the most registered for, for brides. And that is a pretty recession-proof business. They may cut the cost of their wedding, but you can't really the cost of the gifts so much.

You know, people are still buying the...

(CROSSTALK)

STEWART: ... gifts.

CAVUTO: Watch out. I can be as cheap as the next guy. But...

(CROSSTALK)

STEWART: Oh, really? And then...

CAVUTO: They never have paper products on a wedding list, do they, a gift list?

STEWART: Well, it depends. Some people register for books.

CAVUTO: Well, there you go.

STEWART: Yes.

CAVUTO: OK.

So, this stuff does well because creature comforts...

STEWART: Then, we are now doing wonderful foodstuffs with Costco. And Costco, you know, has done extremely well, even in this market, and this environment, because they are providing great value, great quality, at a great price. And that is why I love the mass market.

CAVUTO: This -- the ham sells at Costco?

STEWART: Oh, it does.

CAVUTO: Can we take a look at that guy?

STEWART: This is a Martha Stewart ham.

CAVUTO: That's small by Costco standards, because, Costco, they are the like the Fred Flintstone...

(CROSSTALK)

STEWART: Well, this is -- this is a half of a ham, but these are non- hormone-raised pigs. We chose the pigs ourselves. And this is an old recipe from actually...

CAVUTO: You chose the pigs?

STEWART: Oh, yes. And this ham is actually...

(LAUGHTER)

CAVUTO: How does that work?

STEWART: Well...

CAVUTO: "You are going to die."

STEWART: No.

(LAUGHTER)

STEWART: No, no, no, I don't mean that.

I mean, we chose where they were raised and how they were raised.

CAVUTO: I got you.

STEWART: And then the recipe comes from Kurowycky, who used to have a butcher shop here on First Avenue in New York.

CAVUTO: Got you.

STEWART: And their recipe is delicious. And they gave me the recipe, because they were going out of business. And this is sort of the evolution of their ham.

CAVUTO: All right.

Let me ask you. And I'm -- I know you have a lot of stuff here, but I did want to ask you the environment in all this. We have got a big election going on. I know you were a big Hillary Clinton supporter. You said the economy needed a boost. We needed a tight rein on how the government does.

I assume you are for Barack Obama.

STEWART: I am.

CAVUTO: So, now there is talk that, just since you and I last talked, the economy has swooned a lot more, and we have a lot more trouble, and that he is going to be limited, what he can do.

Will he?

STEWART: Well, I think either candidate is terribly limited in what they can do.

They're going to be -- it is going to be -- I think the SEC -- it is - - it's the government at large that has to make huge decisions about how things are run. They are now the creditors to all these banks. It is like...

CAVUTO: It's weird, isn't it?

STEWART: It's a weird situation. It's the most weird that I can imagine.

(CROSSTALK)

CAVUTO: Well, do you buy that, between that, and I -- and a pox on both parties, Martha -- but that we are moving toward big government, some even argue, toward socialism?

STEWART: Oh, well, I don't know. I really don't know about that, as much as I know that we need a drastic change. We need very good advisory - - advisory boards for the new president. Can't be more of the same. It has to be some, I think, new blood. And...

CAVUTO: But new blood with old ideas, right? I mean, one of the things..

(CROSSTALK)

STEWART: New blood with sensible, good ideas.

CAVUTO: OK. But raising taxes, would -- if you were president of the United States, would you raise taxes in this environment on anyone?

STEWART: You know what? I'm sort of like the odd folk here.

I really think we -- if we need more money, we have to raise taxes. If we don't need more money, we can lower taxes. I am very, very optimistic that, if we get out of a war where we are spending so much money, we will have more money to expend on the programs that this country desperately needs.

CAVUTO: You know what bothers me a little, Martha? That someone is equating a guy who earns $200,000 or $250,000 a year to a Martha Stewart, and lumping them in the same souffle, if you will.

STEWART: Well, when I hear -- when I hear the remarks that are on every radio station, every television station every day, I just scratch my head and wonder, what the heck are they talking about? It's just -- and the public does not understand. I don't think they really understand.

CAVUTO: Well, what -- what about my question? That raising taxes on you, you can absorb that. You're a pretty wealthy woman. But the $200,000, $250,000...

(CROSSTALK)

STEWART: I don't think $250,000 for a young corporation or a small corporation, over $250,000...

(CROSSTALK)

CAVUTO: I am talking for a young couple.

STEWART: Well...

CAVUTO: That is not the same.

STEWART: But you know what? You know, suck it in.

CAVUTO: Really?

(LAUGHTER)

(CROSSTALK)

CAVUTO: That is the message, right? That is the message?

STEWART: Well, you know, that is the way it is.

CAVUTO: And, if they are depressed, they could eat the ham, right?

STEWART: Well, they can budget and they can be careful. And you know what? Things are going to get so much better.

And I'm a total optimist. And I really think that this country is strong roots, strong guts, and it's going to survive this, as it has always survived. And we are still the best. And I just think that we have to realize that, and do what we have to do right now to make it better.

CAVUTO: All right.

STEWART: OK?

CAVUTO: Well, you have made us all feel a lot better. You have done a lot of good.

STEWART: Do I?

CAVUTO: Yes.

STEWART: Did my optimism come out?

CAVUTO: Well, you are very optimistic. And you are living proof, coming back through some tough times and doing OK.

Yes.

STEWART: Well, I still am the optimist.

CAVUTO: There you go.

All right, guys, this ham, it's mine. Do not touch.

(LAUGHTER)

CAVUTO: Look at -- we have that guy right there.

(CROSSTALK)

STEWART: And what about the blanket? Don't you want to wrap yourself in this?

CAVUTO: I would like you to wrap it around his head.

(LAUGHTER)

(CROSSTALK)

CAVUTO: Look at this. You are so good at this stuff. You work it into everything.

(LAUGHTER)

CAVUTO: All right.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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