Larry Kudlow, who should know better, defended a deeply flawed corporate-welfare agency Thursday.

Kudlow, President Trump's chief economic adviser, delivered the keynote speech at the annual conference of the Export-Import Bank, a federal agency that subsidizes U.S. exports by extending taxpayer-backed financing for foreign buyers. The agency has been hobbled since 2015 because conservative senators have blocked appointees to Ex-Im's board. Kudlow said the White House needs a fully functioning Ex-Im Bank for economic and national-security purposes.

This is wrong, and Kudlow probably knows it.

The past few years, in which the Ex-Im Bank has been barred from making loans and loan guarantees above $10 million, have shown how the agency was an unneeded gift to big banks and big exporters. It was "featherbedding," as Trump accurately called it in 2016.

Throughout the presidencies of George W. Bush and Barack Obama, about 40 percent of the financing the Ex-Im Bank provided was for Boeing jets, hence the agency’s nickname, “Boeing’s bank.” Without a quorum to approve large deals since July 2015, Boeing has had to find financing in the private sector.

And it's done so smashingly well.

Last year was Boeing’s best year ever, with exports particularly strong. One reason was “robust” private sector financing, as Boeing puts it. “Commercial Aircraft Buyers Enjoy Unprecedented Capital Access,” Aviation International News reported in 2017, citing “unprecedented levels of competition” among lenders and insurers eager to finance aircraft exports.

These days, Boeing has 99 problems, but financing isn't one of them. Apollo Global Management, a major private-equity fund, announced this week it would launch a $1 billion aircraft-financing fund.

Defenders of the Ex-Im Bank always claimed the bank was “profitable.” It turns out that if the government leaves a profitable line of business, private companies will compete to take its place, and that competition lowers prices. This is a truth Kudlow, a free-market advocate, has always known, and which the past 45 months have demonstrated.

The economy doesn’t need the Ex-Im Bank to provide big-dollar subsidies to huge exporters. Small exporters can already get financing from the Ex-Im Bank in its current state. There's no economic justification for the old "fully functioning" model.

Kudlow had a second argument for the Ex-Im Bank, calling it a “national security weapon” needed to combat Chinese machinations. The administration does indeed need tools to battle China’s expansionism, but there couldn’t be a worse tool than the Ex-Im Bank because it doesn't serve America’s strategic interests.

It’s calibrated to serve U.S. exporters by guaranteeing loans to foreign buyers. That means the Ex-Im Bank’s subsidies go to foreign companies and governments. Guess who is typically the top recipient of the Ex-Im Bank subsidies. Yes, it's China!

In fiscal 2014, the last year in which the Ex-Im Bank could grant big subsidies, China was by far the biggest recipient of financing, getting $2.2 billion in taxpayer-backed loans and guarantees. An overwhelming majority of that money subsidized Chinese state-owned businesses. That means the Ex-Im Bank mostly subsidizes the very Chinese companies Trump says he wants to fight.

The Ex-Im Bank actually extended $50 million in loan guarantees to the Export-Import Bank of China in recent years. It often subsidizes China’s state-owned banks and development agencies. It has subsidized microchip factories in China. Instead of “Boeing’s bank,” you could call Ex-Im “Beijing’s bank.”

You can’t counter China by subsidizing it. You don’t make America great by throwing subsidies at our rivals’ governments and putting our own taxpayers on the hook for loans made by banks around the world to buyers overseas. You don't drain the swamp by restoring Obama's favorite corporate welfare tool.

Confirming Ex-Im’s board would simply restore it to what it was under Bush and Obama. Conservatives in the Senate should refuse to do so.

Any vote confirming Ex-Im nominees should come only after passing a bill to reform the Ex-Im Bank drastically. If Congress wants to keep the Ex-Im Bank alive, it should freeze in place the current, narrower version of the bank and insist on no deals over $10 million, less than $3.5 billion in total financing per year, with two-thirds of the financing dedicated to small exporters.

If a tool is needed to combat China, Beijing’s bank won’t do the trick.