The political press has rediscovered Ron Paul's wilderness years as a former congressman selling investment and political newsletters. (Classic NYT hed: "Bias in Ron Paul's Newsletters Draws New Attention." From you, guys!) No one has dug for anything new since James Kirchick first investigated the old newsletters, pulling gems -- ostensibly written by Paul -- along the lines of "if you have ever been robbed by a black teenaged male, you know how unbelievably fleet of foot they can be," and "opinion polls consistently show that only about 5 percent of blacks have sensible political opinions." Instead, we're getting some low-heat follow up stories. Calls to Paul's campaign are not returned. I doubt they will be. (I'm waiting to see if anyone currently tracking Paul bothers to ask him.) Paul feels that he has fully explained this stuff.
Leaving that aside, I'm not seeing many investigations of how the genteel old guy who opposes DADT and the war on drugs came to be associated with this. The answers, largely, were in a 2008 article that Julian Sanchez and I wrote for Reason. This is the key historical detail, explaining how Murray Rothbard and Lew Rockwell, Paul's friends and allies in his 1988 takeover of the Libertarian Party, came to believe that the sort of people who joke about blacks and welfare checks should be Hayekians.
Rockwell explained the thrust of the idea in a 1990 Liberty essay entitled "The Case for Paleo-Libertarianism." To Rockwell, the LP was a "party of the stoned," a halfway house for libertines that had to be "de-loused." To grow, the movement had to embrace older conservative values. "State-enforced segregation," Rockwell wrote, "was wrong, but so is State-enforced integration. State-enforced segregation was not wrong because separateness is wrong, however. Wishing to associate with members of one's own race, nationality, religion, class, sex, or even political party is a natural and normal human impulse."
The most detailed description of the strategy came in an essay Rothbard wrote for the January 1992Rothbard-Rockwell Report, titled "Right-Wing Populism: A Strategy for the Paleo Movement." Lamenting that mainstream intellectuals and opinion leaders were too invested in the status quo to be brought around to a libertarian view, Rothbard pointed to David Duke and Joseph McCarthy as models for an "Outreach to the Rednecks," which would fashion a broad libertarian/paleoconservative coalition by targeting the disaffected working and middle classes. (Duke, a former Klansman, was discussed in strikingly similar terms in a 1990 Ron Paul Political Report.) These groups could be mobilized to oppose an expansive state, Rothbard posited, by exposing an "unholy alliance of 'corporate liberal' Big Business and media elites, who, through big government, have privileged and caused to rise up a parasitic Underclass, who, among them all, are looting and oppressing the bulk of the middle and working classes in America."
... The populist outreach program centered on tax reduction, abolition of welfare, elimination of "the entire 'civil rights' structure, which tramples on the property rights of every American," and a police crackdown on "street criminals." "Cops must be unleashed," Rothbard wrote, "and allowed to administer instant punishment, subject of course to liability when they are in error." While they're at it, they should "clear the streets of bums and vagrants. Where will they go? Who cares?" To seal the deal with social conservatives, Rothbard urged a federalist compromise in their direction on "pornography, prostitution, or abortion." And because grassroots organizing is "plodding and boring," this new paleo coalition would need to be kick-started by "high-level, preferably presidential, political campaigns."
What Sanchez and I argued at the time was that this sort of populism proved to be a dead end, and Paul was doing much, much better as an anti-war libertarian. This is still the case. As the Times story points out, Paul got yuks from Jay Leno for making fun of the biases of other candidates. But anyway, this was where the racist junk came from. Rothbard is dead; Rockwell, who has also long moved past this, remains in the Paul orbit.