You can't beat China by subsidizing it

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.