Other newsletters had strange conspiracy theories about homosexuals, the CIA, and AIDS.
In 1996 when the Texas Monthly investigated the newsletters, Paul took responsibility for them and said that certain things were taken out of context. (It's hard to imagine a context that would make the above quotes defensible.)
When the newsletter controversy came up again during the 2008 campaign, Paul explained that he didn't actually write the newsletters but because they carried his name he was morally responsible for their content. Further, he didn't know exactly who wrote the offensive things and they didn't represent his views.
But it is still a serious issue. Jamie Kirchick reported in The New Republic that Paul made nearly one million dollars in just one year from publishing the newsletters. Could Paul really not understand the working of such a profitable operation? Reporters at the libertarian-leaning Reason magazine wrote that the author was likely longtime Paul-friend and combative polemicist Lew Rockwell.
Even though many of the newsletters are written in a first person, conversational style, many observers don't believe that Ron Paul actually wrote them.
There aren't any videos on YouTube with Paul speaking in incendiary terms about minorities. The newsletters don't "sound" like Ron Paul -- he doesn't do wordplay like "Morondon" or use prefixes like "semi-criminal" or "half-educated" in his speech or his recent writings. Further, most newsletter and direct-mail operations in politics employ ghostwriters.
So why were Ron Paul or his ghostwriters engaged in racism and conspiracy theories? And why did Ron Paul allow this?
The first answer is simply that marginal causes attract marginal people.
The Gold Standard and non-interventionism have long been pushed to the fringe of our politics, and ambitious people tend to dive into the mainstream. That means that some of the 'talent' that marginalized ideas attract will be odd and unstable.
There are two strategies for dealing with this problem. You purge your movement of cranks to preserve credibility and risk alienating a chunk of supporters. Or you let everyone in your movement fly their freak flag and live with the consequences. Ron Paul, being a libertarian, has always done the latter.
The second answer to this question: These newsletters were published before a decade of war that has exhausted many Americans, before the financial crisis, and before the Tea Party.
All three made Ron Paul's ideas seem more relevant to our politics. They made anti-government libertarianism seem (to some) like a sensible corrective.
But in the 1990s and 1980s, anti-government sentiment was much less mainstream. It seemed contained to the racist right-wing, people who supported militia movements, who obsessed over political correctness, who were suspicious of free-trade deals like NAFTA.