Many bad liberal ideas come out of California; here’s one traveling under a conservative cover. No one is calling California insurance commissioner cum GOP gubernatorial candidate Steve Poizner a “Fiscal Conservative in Name Only” — not yet. But Steve Poizner should be worried.

Poizner has launched his own personal jihad against so-called “indirect investments in terrorism” — which comes down to any insurance company that does business with any company that does business in Iran. This may sound conservative at first blush — getting tough on terrorism — but, actually, it’s a profound abuse of government power. The federal government already forbids direct investments in Iran and other state sponsors of terrorism. What’s wrong with using state insurance regulations to crack down on terrorism? Well, just about everything.

In the first place, notice that phrase “indirect investments.” It means the line is blurry and unclear — perfect for the unscrupulous government official seeking to shake down a company. (As Redcounty.com political consultant and blogger Matthew Cunningham put it, “I thought subpoenaing business executives and hauling them before a public hearing for a good flaying in front of TV cameras was what Democrats did?”)

And what will happen when the Son of Jerry Brown or Nancy Pelosi occupies the post of California insurance commissioner? Will businesses that do business with the Catholic Church or the LDS church take a hit for cooperating with “discriminators”? Could Israel, itself already the target of divestment campaigns in Europe, become the new South Africa in the minds of San Francisco liberals? But already insurance commissioners in Florida and Pennsylvania are threatening to jump on Poizner’s ill-conceived bandwagon.

Real conservatives should stand for limited government and against crony capitalism. The purpose of an insurance commissioner and insurance regulations is to make sure that those of us who pay into insurance pools get our money — not to play Jack Bauer, freelance terrorism expert, to the cheers of the crowd.