Pajamas Media and The New Republic have stories about various racist, anti-Semitic, and generally kooky comments that could be found in some old political and investment newsletters published under Ron Paul's name.
I give Paul the benefit of the doubt on this one [if nothing else, he's a savvy politician--you don't get elected to Congress three times as a non-incumbent if you aren't--and these quotes are obviously bad politics], and assume that some right-wing cranks paid him to use him name on their newsletters, and he didn't actually read the newsletters carefully if at all, much less write them. That shows very poor judgment, but is a lot less damning than if he did read, write, or edit these newsletters.
Regardless, it's disturbing in and of itself that the kind of people who write such things would want to associate themselves with Paul's name, and the kind of people who enjoy reading such things would subscribe to these newsletters because they admire Paul.
Yet, as Kirchik in TNR notes, there are really two disparate groups to whom the limited-government message appeals: philosophical libertarians (which consists of a tiny percentage of Americans, but something like 10% are at least inclined toward a general libertarian perspective), and those who hold a deep grudge against the federal government based on a range of nutty conspiracy theories, ranging from old chestnuts like a freemason conspiracy, a Council on Foreign Relations/Bildeberger conspiracy, or a conspiracy to strip the U.S. of its sovereignty in favor of world government; to variations on old anti-Semitic themes (ranging from domination by Zionist conspirators to domination by Jewish bankers led by the Rothchilds to domination by Jews in Hollywood); to newer racist theories; to novel conspiracy theories about 9/11, the pharmaceutical industry, etc.
Mainstream libertarian groups like Cato and Reason have nothing to do with the latter types, but other self-proclaimed libertarian groups, like the Ludwig Von Mises Institute, play footsie with them. (I recently turned down an invitation to do a book review for an academic journal published by LVMI because I don't want my name associated with the Institute.) Paul himself seems to have made a career of straddling the line between respectable libertarian sentiment and conspiracy-mongering nuttiness, receiving support and accolades from both sides.
But now that he wants to be taken seriously as a presidential candidate, he can't get away with it anymore. Regardless of his future action, Paul deserves strong criticism for consorting and collaborating with various unsavory characters for so many years. But he could also do liberty-lovers a big favor, and perhaps save his respectability as a viable protest candidate, if he would come out with a very strong statement that he's made some errors in his past associations, but wants to make it clear now that he neither solicits nor welcomes support from racists, neo-Confederates, conspiracy-mongers, anti-Semites, and so forth.
The biggest problem with hoping for such a statement is that I'm not completely convinced that Paul in fact finds support from at least some of these groups entirely unwelcome.