For Paulistas, who claim that the ugly, racist, and homophopic statements contained in Ron Paul's 20-year-old newsletters are ugly, racist, and homophobic because they have been taken out of context, economics professor Steve Horwitz offers some context over at Bleeding Heart. And it is not less but more damning for two big reasons:

One, Horwitz recounts chapter and verse demonstrating that comments calling blacks criminally inclined, among other even more vicious things, were not tossed off by some low-level, immature Paul apparatchik who didn't know any better. Rather, they were part of a concerted and well thought out political strategy by Ron Paul's intellectual acolytes and handlers, namely Murray Rothbard and Lew Rockwell, to court working class white males by aligning with some of the nastiest strains in the hard-right, paleo thinking. Writes Horwitz:

The paleo strategy, as laid out here by Rockwell, was clearly designed to create a libertarian-conservative fusion…With everyone broadly agreeing that the market had won, how could you hold together a coalition that opposed the left? Oppose them on the culture. If you read Rockwell's manifesto through those eyes, you can see the "logic" of the strategy. And it doesn't take a PhD in Rhetoric to see how that strategy would lead to the racism and other ugliness of newsletters at the center of this week's debates. The paleo strategy was a horrific mistake, both strategically and theoretically, though it apparently made some folks (such as Rockwell and Paul) pretty rich selling newsletters predicting the collapse of Western civilization at the hands of the blacks, gays, and multiculturalists.

Two, there is more where these newsletters came from. Even though the effort to forge this paleo-libertarian alliance was eventually abandoned, much ugly baggage had already been accumulated. Ron Paul didn't write these newsletters, but, notes Horwitz, "he was willing to, metaphorically, toast a marshmallow on the cross others were burning." What's more:

Even after the paleo strategy was abandoned, Ron was still there walking the line between "mainstream" libertarianism and the winking appeal to the hard right courted by the paleo strategy. Paul's continued contact with the fringe groups of Truthers, racists, and the paranoid right are well documented. Even in 2008, he refused to return a campaign contribution of $500 from the white supremacist group Stormfront. You can still go to their site and see their love for Ron Paul in this campaign and you can find a picture of Ron with the owner of Stormfront's website. Even if Ron had never intentionally courted them, isn't it a huge problem that they think he is a good candidate? Doesn't that say something really bad about the way Ron Paul is communicating his message? Doesn't it suggest that years of the paleo strategy of courting folks like that actually resonated with the worst of the right? Paul also maintained his connection with the Mises Institute, which has itself had numerous connections with all kinds of unsavory folks: more racists, anti-Semites, Holocaust deniers, the whole nine yards. Much of this stuff was ably documented in 2007 and 2008 by the Right Watch blog.

Given this backdrop, the options before libertarians—whose numbers have swollen in recent times in no small part due to Paul—is that they can circle the wagons around him and attack his attackers by: blaming his troubles on a giant media conspiracy; condemning libertarians troubled by the newsletters as rigid purists; changing the subject by comparing Paul's current, cleansed agenda with that of his opponents; cheering him on as he walks off TV interviews and so on.

Or it can demand accountability from Paul. This might mean that Paul would have to give a major speech—a la Obama's Jeremiah Wright address—taking head on all the questions swirling around him. Such a speech must begin with a mea culpa that goes beyond "I disavow them (the newsletters)." Paul has to take responsibility for them. He has to admit that he and his organization took a seriously misguided intellectual/political turn two decades ago. However, in his heart or hearts, he remained uncomfortable with the figures and forces that he allowed himself to become allied with. Both in their substance and spirit they were, are and will always remain counter to everything he—and libertarianism— stands for. He needs to argue how his philosophy of the dignity and rights of every individual informs his pro-liberty and anti-war agenda, which, at its core, rejects every form of soft or hard racism and other ugly collectivisms.

No doubt such a speech initially will raise more questions about Paul's character and convictions than it answers—which is why his loyalists want all of this to just go away without him having to face the inconvenience of saying anything more. There is absolutely no guarantee that the speech will save Paul's candidacy. However, there is some reason to hope that it would. Paul loyalists might not buy this, but what's surprising about the timing of the controversy is not that it occurred at all, but that it took so long in this election cycle to flare up. After all, most Paul watchers in MSM knew about the existence of these statements from the last time around. Yet it seems no one wanted to bring them up again until Paul gained so much traction that ignoring them would have been a serious dereliction of duty. Observe, for example, CNN's poor Gloria Borger's apologetic tone when Paul terminated the interview with her. "It's [the questioning] legitimate, it's legitimate" she pleaded plaintively, even deferentially thanking Paul for his time as he removed his wire somewhat huffily.

All of this is actually testimony to Paul's remarkable ability to generate goodwill both for himself and his cause. I have never met Paul. But everyone I know who has likes him. They can't believe that he is capable of harboring the kind of vile sentiments expressed in the newsletters. He seems just too mild and innocuous and decent and well meaning.

The only other politician in recent times who has matched Paul's goodwill-generating capacity is Barack Obama. When the Jeremiah Wright scandal broke, Obama had grown a layer of Teflon. No one was willing to buy that the man who was loftily declaring that "there is no white America, there is no black America, there is only the United States of America" could actually have any sympathy for the kind of divisive racial rhetoric that Wright was peddling. Apart from Obama's right-wing detractors, everyone was eager to believe him. Hence Obama could make a speech distancing himself from Wright and condemning his vitriol without looking hypocritical or losing credibility.

Paul could pull off something similar, although, admittedly, he has a rockier road ahead of him given that he is more directly culpable for the statements in the newsletters than Obama was for his preacher's remarks. But if Paul stumbles and falls in the course of explaining what the philosophy that has inspired him does not stand for—namely the kind of thing contained in his newsletter—he will have turned his downfall into an even bigger teaching moment than his meteoric rise.

At any rate, what is the alternative? To die a death from a thousand cuts as his political and intellectual opponents dig up, bit by bit, the ample ammunition that he has handed them? Worse, given that Paul has become the most prominent spokesman—even standard bearer—of the libertarian movement, if he does not clear the air, it too will become tainted with his sins at a time when, for the first time ever, it is at the cusp of mainstream respectability— thanks to him, ironically enough!

Paul and his loyalists are understandably buoyed by the recent polls that show him leading in Iowa. But particularly if he wins, the scrutiny will intensify. Crying foul at that stage simply won't do.

Paul's choice, then, is to try and proactively shape the events that will surely follow—or get into a defensive crouch as they unfold, attacking the attackers, playing the victim. If he does the former, he might at least be able to save the movement he has created if not himself. If the latter, he risks taking it down with him.