To say that Barney Frank and Larry Kudlow occupy opposite ends of the economic policy spectrum is like saying black is the opposite of white, or Milton Friedman might disagree from time to time with Vladimir Lenin. Frank, the Massachusetts Democrat who chairs the House Financial Services Committee makes no bones about it: he wants to tax the rich more and help out economically stressed Americans. Kudlow, former chief economist for Bear-Stearns and current host of the CNBC show Kudlow & Company, is the archetypical supply-sider — raising taxes is always bad, and cutting them is always the right prescription.

But no matter how much you might disagree with either Frank or Kudlow’s particular strand of economic ideology, you have to concede, the two men are both smart cookies. Reading the transcript of them jousting on CNBC Friday morning is a parry-and-thrust pleasure.

The context: Frank is pushing for a second stimulus plan, which he says could be paid for by taxing “upper-income” Americans, and for which he would only need a fraction of the billions of dollars that have spent on a useless war. Kudlow counters that a slumping economy is the worst time to raise taxes, and the best thing to do now is let the first economic stimulus work its way through the economy before doing anything else.

A couple of excerpts: (All italics are mine)

KUDLOW: I think the biggest issue right now is the energy markets are creating a temporary shock, and I think that is a depressant on the economy, though certain sectors in the economy are doing very well. We’re actually seeing some great improvement. The rate of mortgage delinquencies, for example, and foreclosures is really slowing markedly. So that market correction is occurring.

And I just don’t want to raise taxes right now. I think that sends the wrong message to entrepreneurs and the business people. I would go very slow….

FRANK: First of all, yes, it’s good news that the rate of increase in foreclosures is declining, but, you know, that is a decrease in the rate of increase…

We have a package… that would, we think, diminish substantially the number of foreclosures. Not bring them out altogether, which shouldn’t be done. Some foreclosures should go forward. If we don’t do anything in the housing area, then you are going to get an increase in the total number of foreclosures, which is a negative that still hasn’t been fully — fully put forward.

How the World Works appreciates the effortless way Frank moved from correcting the mistaken impression that one might have gotten from Kudlow — foreclosures rates are declining! — to pushing his own policy proposals on foreclosures. But Kudlow immediately responds with a call for more deregulation.

KUDLOW: I don’t know what Congress, Washington, could do right now in the short term. I do think the mortgage markets are working their way through this problem….

FRANK: …Larry, on the mortgage thing, you know, I understand the free market argument. But, boy, if there is ever a sector of the free market that has kind of lost some credibility, it’s the mortgage market.

KUDLOW: Well, I don’t know. I mean, I think a lot of these second and third home investors have been shaken out of market.

FRANK: Larry, they’re not covered by our bill. Our bill is for single-home owner-occupied.

KUDLOW: You know, your bill has pluses, as I’ve acknowledged to you publicly on our program. And we appreciate you as a guest. It doesn’t seem like the Congress wants to go through with it.

Sometimes it’s better to just kind of let things work themselves out…

FRANK: Well, especially if you’re doing very well in the economy…

Yes! No Friday morning in which the stock market is cratering (the Dow was down almost three hundred points a couple of hours before the close of trading) is complete without a little dose of class warfare.

KUDLOW: We’ve had a lot of fiscal stimulus. I would just go slow, sir, with all the greatest respect, I would go slow. The economy may prove to be more resilient.

FRANK: Larry, the problem is that a lot of people who are well-off would go slow. And I don’t mean this personally to you, but you are understating and underestimating the pain that exists in this economy and the social and economic consequences that result from it.