Although CNBC "Mad Money" host Jim Cramer has backed off his hyperbolic attacks on President Barack Obama ever since his "Daily Show" appearance, he's shown that he's not afraid to take on the Democratic-controlled Congress.
So, to give credit where credit is due, the "Mad Money" host dedicated an entire segment to the Employee Free Choice Act, aka card check and how its passage by Congress could be detrimental to Wal-Mart's (NYSE:WMT) stock price on his April 3 program. And during the segment, Cramer used three references to Soviet/Russian communism to describe the Democrat effort pushing card check.
"Right now, in Congress - they're getting ready for what is essentially a referendum on Wal-Mart," Cramer said. "And the referendum's name is the Employee Free Choice Act, also known by slang as card check - a bill that will make it much easier for workers to form unions and much harder for employers to get in their way."
The "Mad Money" host explained just how large of a role Wal-Mart plays in the economy, specifically the American workforce, as unemployment is approaching double-digits.
"For Wal-Mart, which has 1.4 million in employees in the United States - 1.4 million, a company that is loathed by most Bolsheviks, by the Democrats - hey it's my own party, you'd think I'd be getting the name right by now. It is loathed by the unions, Wal-Mart - like no other company. The stakes of this legislation couldn't be higher."
Cramer explained this was already baked into Wal-Mart's stock price and it could be played as a speculation trade depending on how one thought the card check vote might go when it comes up. Wal-Mart stock is trading at $53.80 a share and has traditionally been one of the stocks investors flee to during slow economic times.
"This stuff - it's got Wall Street very worried," Cramer said. "I don't think the big boys will stop being concerned until card check either fails or is filibustered to death. The president is a strong backer of card check. There's no doubt the House, which might as well be Nancy Pelosi's own little politburo, will approve this legislation, given that card check passed - the exact same bill with 20 votes to spare in 2007."
According to Cramer, the ultimate decision on card check will come down to the Senate. And last month, Sen. Arlen Specter, R-Pa., came out opposing card check legislation. Specter has been the important swing vote in the U.S. Senate that Democrats have needed to thwart a Republican filibuster on some bills, making his opposition very significant.
"So if you buy Wal-Mart, you're putting your faith in the Senate," Cramer said. "Sounds crazy? That's why I consider it speculation. The good news here for shareholders is though the Republicans will definitely filibuster the bill and the only Republican who voted for it in the last Congress - Arlen Specter, has switched sides because of a primary challenge."
Also on the side of the anti-card check caucus in the U.S. Senate are some more moderate Democrats, giving it another hurdle to overcome to become law.
"Also a number of more moderate Democrats - I like to call them the Menshevik block - have expressed lukewarm feelings about the bill," Cramer said. "Maybe the most encouraging news from the Democrats is [Sen.] Diane Feinstein has explicitly withdrawn her support for the current version."
"Even some Democrats seem to want to pass this thing in the middle of a recession, I don't know, and set us back who knows how many months," Cramer continued.
In the final analysis, Cramer was doubtful card check would pass in this Congress and gave Wal-Mart's stock a thumb's up for the time being.
"I don't think card check will pass," Cramer said. "But the Street isn't going to stop fretting and start buying until it fails and that's why I think you have an opportunity to get in ahead of the bog boys on this one."
But the "Mad Money" host made one observation that is a sad commentary on the state of government and how it applies to business - which what is going on in Washington, D.C. has a larger impact on Wal-Mart than its own sales and business decisions.
"Here's the bottom line - the most important thing for Wal-Mart right now has nothing to do with decisions that are being made in Bentonville, Ark. or about comparable sales," Cramer said. "It's all about one decision that's going to be made in Washington, D.C. - whether or not Congress passes the Employee Free Choice Act, card check in its current anti-business, earnings-destroying form."