Alternative fantasies

HERE’S A STELLAR IDEA: Let’s pass a tax on Internet companies to create a state fund that invests in worthy newspapers. That’s basically akin to what alternative energy venture capitalists are proposing to do with Proposition 87 -- tax your competitors (the oil industry) to fund yourself.

Private capital is flooding into the alternative energy sector already, but you’d hardly know it from the glamorous Yes on 87 campaign. That’s because the measure’s backers appear to be managing a film awards ceremony rather than a political campaign. It seems like every half-hour we get an e-mail touting the latest starlet to just say yes to 87. Alyssa Milano! Julia Roberts! Sharon Stone! Eva Langoria! Salma Hayek!

Bill Clinton! The former president is on the side of the starlets and is featured in the most stirring TV ads of the political season (and there are plenty on both sides of 87, given the more than $125 million raised to support or oppose the initiative).

With all due respect to a former president we admire, his shilling for this initiative is, well, embarrassing. He should know better than Alyssa.

Did we mention that venture capitalists with investments in alternative energy firms are huge donors to the campaign? There is nothing to prevent such investors from sitting on the board that allocates the research money generated by the proposition, which is precisely the conflict-ofinterest problem that has tainted California’s last experiment with taxpayer-funded research, 2004’s stem cell initiative .

Silicon Valley investor Vinod Khosla, who has given $1.1 million to the Yes on 87 campaign, has promised to donate any profits from companies he owns that benefit from the proposition’s funding to worthy causes. Other backers haven’t made the same vow.

We don’t need a state industrial policy to develop alternative energy; the market is taking care of that. Nor should voters be fooled by claims that oil companies are undertaxed in this state. Those other states touted as having oil extraction taxes do not have California’s high corporate income taxes. And it doesn’t take a Nobel laureate in economics to figure out -- contrary to the proposition’s wishful thinking -- that those extraction taxes will somehow get passed on to consumers.