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This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (January 2008)

Privatization (also spelled privatisation) is the incidence or process of transferring ownership of a business, enterprise, agency, public service or property from the public sector (the state or government) to the private sector (businesses that operate for a private profit) or to private non-profit organizations. The term is also used in a quite different sense, to mean government out-sourcing of services to private firms, e.g. functions like revenue collection, law enforcement, and prison management.^[1]

The term "privatization" also has been used to describe two unrelated transactions. The first is a buyout, by the majority owner, of all shares of a public corporation or holding company's stock, privatizing a publicly traded stock, and often described as private equity. The second is a demutualization of a mutual organization or cooperative to form a joint stock company.^[2]

Forms of privatization[link]

There are four main methods^{[citation needed]} of privatization:

1. Share issue privatization (SIP) - selling shares on the stock market
2. Asset sale privatization - selling an entire organization (or part of it) to a strategic investor, usually by auction or by using the Treuhand model
3. Voucher privatization - distributing shares of ownership to all citizens, usually for free or at a very low price.
4. Privatization from below - Start-up of new private businesses in formerly socialist countries.

Choice of sale method is influenced by the capital market, political and firm-specific factors. SIPs are more likely to be used when capital markets are less developed and there is lower income inequality. Share issues can broaden and deepen domestic capital markets, boosting liquidity and (potentially) economic growth, but if the capital markets are insufficiently developed it may be difficult to find enough buyers, and transaction costs (e.g. underpricing required) may be higher. For this reason, many governments elect for listings in the more developed and liquid markets, for example Euronext, and the London, New York and Hong Kong stock exchanges.

As a result of higher political and currency risk deterring foreign investors, asset sales occur more commonly in developing countries.

Voucher privatization has mainly occurred in the transition economies of Central and Eastern Europe, such as Russia, Poland, the Czech Republic, and Slovakia. Additionally, Privatization from below is/has been an important type of economic growth in transition economies.

A substantial benefit of share or asset-sale privatizations is that bidders compete to offer the highest price, creating income for the state in addition to tax revenues. Voucher privatizations, on the other hand, could be a genuine transfer of assets to the general population, creating a real sense of participation and inclusion. If the transfer of vouchers is permitted, a market in vouchers could be created, with companies offering to pay money for them.

Secured borrowing[link]

Some privatization transactions can be interpreted as a form of a secured loan^[3][4] and are criticized as a "particularly noxious form of governmental debt".^[3] In this interpretation, the upfront payment from the privatization sale corresponds to the principal amount of the loan, while the proceeds from the underlying asset correspond to secured interest payments – the transaction can be considered substantively the same as a secured loan, though it is structured as a sale.^[3] This interpretation is particularly argued to apply to recent municipal transactions in the United States, particularly for fixed term, such as the 2008 sale of the proceeds from Chicago parking meters for 75 years. It is argued that this is motivated by "politicians' desires to borrow money surreptitiously",^[3] due to legal restrictions on and political resistance to alternative sources of revenue, viz, raising taxes or issuing debt.

Etymology[link]

The Economist magazine introduced the term in the 1930s in covering Nazi German economic policy.^[5][6]

History[link]

This section requires expansion.

The history of privatization dates from Ancient Greece, when governments contracted out almost everything to the private sector.^[7] In the Roman Republic private individuals and companies performed the majority of services including tax collection (tax farming), army supplies (military contractors), religious sacrifices and construction. However, the Roman Empire also created state-owned enterprises—for example, much of the grain was eventually produced on estates owned by the Emperor. Some scholars suggest that the cost of bureaucracy was one of the reasons for the fall of the Roman Empire.^[7]

Perhaps one of the first ideological movements towards privatization came during China's golden age of the Han dynasty. Taoism came into prominence for the first time at a state level, and it advocated the laissez-faire principle of Wu wei (無為), literally meaning "do nothing".^[8] The rulers were counseled by the Taoist clergy that a strong ruler was virtually invisible.

During the Renaissance, most of Europe was still by and large following the feudal economic model. By contrast, the Ming dynasty in China began once more to practice privatization, especially with regards to their manufacturing industries. This was a reversal of the earlier Song dynasty policies, which had themselves overturned earlier policies in favor of more rigorous state control.^[9]

In Britain, the privatization of common lands is referred to as enclosure (in Scotland as the Lowland Clearances and the Highland Clearances). Significant privatizations of this nature occurred from 1760 to 1820, coincident with the industrial revolution in that country.

In more recent times, Winston Churchill's government privatized the British steel industry in the 1950s, and West Germany's government embarked on large-scale privatization, including selling its majority stake in Volkswagen to small investors in a public share offering in 1961.^[7] In the 1970s General Pinochet implemented a significant privatization program in Chile. However, it was in the 1980s under the leaderships of Margaret Thatcher in the UK and Ronald Reagan in the USA, that privatization gained worldwide momentum. In the UK this culminated in the 1993 privatization of British Rail under Thatcher's successor, John Major; British Rail having been formed by prior nationalization of private rail companies.

Significant privatization of state owned enterprises in Eastern and Central Europe and the former Soviet Union was undertaken in the 1990s with assistance from the World Bank, the U.S. Agency for International Development, the German Treuhand, and other governmental and nongovernmental organizations.

A major ongoing privatization, that of Japan Post, involves the Japanese post service and the largest bank in the world. This privatization, spearheaded by Junichiro Koizumi, started in 2007 following generations of debate. The privatization process is expected^{[by whom?]} to last until 2017.

Results[link]

Literature reviews^[10][11] find that in competitive industries with well-informed consumers, privatization consistently improves efficiency. The more competitive the industry, the greater the improvement in output, profitability, and efficiency.^[12] Such efficiency gains mean a one-off increase in GDP, but through improved incentives to innovate and reduce costs also tend to raise the rate of economic growth. Although typically there many costs associated with these efficiency gains,^[13] many economists argue that these can be dealt with by appropriate government support through redistribution and perhaps retraining.

Privatizations in Russia and Latin America were accompanied by large-scale corruption during the sale of the state-owned companies. Those with political connections unfairly gained large wealth, which has discredited privatization in these regions. While media have reported widely the grand corruption that accompanied the sales, studies have argued that in addition to increased operating efficiency, daily petty corruption is, or would be, larger without privatization, and that corruption is more prevalent in non-privatized sectors. Furthermore, there is evidence to suggest that extralegal and unofficial activities are more prevalent in countries that privatized less.^[14]

Opinion[link]

Support[link]

Studies show that private market factors can more efficiently deliver many goods or service than governments due to free market competition.^[10][11][12] Over time this tends to lead to lower prices, improved quality, more choices, less corruption, less red tape, and/or quicker delivery. Many proponents do not argue that everything should be privatized. According to them, market failures and natural monopolies could be problematic. However, anarcho-capitalists prefer that every function of the state be privatized, including defense and dispute resolution.

Proponents of privatization^[who?] make the following arguments:

• Performance. State-run industries tend to be bureaucratic. A political government may only be motivated to improve a function when its poor performance becomes politically sensitive.
• Increased efficiency. Private companies and firms have a greater incentive to produce more goods and services for the sake of reaching a customer base and hence increasing profits. A public organization would not be as productive due to the lack of financing allocated by the entire government's budget that must consider other areas of the economy.
• Specialization. A private business has the ability to focus all relevant human and financial resources onto specific functions. A state-owned firm does not have the necessary resources to specialize its goods and services as a result of the general products provided to the greatest number of people in the population.
• Improvements. Conversely, the government may put off improvements due to political sensitivity and special interests—even in cases of companies that are run well and better serve their customers' needs.
• Corruption. A state-monopolized function is prone to corruption; decisions are made primarily for political reasons, personal gain of the decision-maker (i.e. "graft"), rather than economic ones. Corruption (or principal-agent issues) in a state-run corporation affects the ongoing asset stream and company performance, whereas any corruption that may occur during the privatization process is a one-time event and does not affect ongoing cash flow or performance of the company.
• Accountability. Managers of privately owned companies are accountable to their owners/shareholders and to the consumer, and can only exist and thrive where needs are met. Managers of publicly owned companies are required to be more accountable to the broader community and to political "stakeholders". This can reduce their ability to directly and specifically serve the needs of their customers, and can bias investment decisions away from otherwise profitable areas.
• Civil-liberty concerns. A company controlled by the state may have access to information or assets which may be used against dissidents or any individuals who disagree with their policies.
• Goals. A political government tends to run an industry or company for political goals rather than economic ones.
• Capital. Privately held companies can sometimes more easily raise investment capital in the financial markets when such local markets exist and are suitably liquid. While interest rates for private companies are often higher than for government debt, this can serve as a useful constraint to promote efficient investments by private companies, instead of cross-subsidizing them with the overall credit-risk of the country. Investment decisions are then governed by market interest rates. State-owned industries have to compete with demands from other government departments and special interests. In either case, for smaller markets, political risk may add substantially to the cost of capital.
• Security. Governments have had the tendency to "bail out" poorly run businesses, often due to the sensitivity of job losses, when economically, it may be better to let the business fold.
• Lack of market discipline. Poorly managed state companies are insulated from the same discipline as private companies, which could go bankrupt, have their management removed, or be taken over by competitors. Private companies are also able to take greater risks and then seek bankruptcy protection against creditors if those risks turn sour.
• Natural monopolies. The existence of natural monopolies does not mean that these sectors must be state owned. Governments can enact or are armed with anti-trust legislation and bodies to deal with anti-competitive behavior of all companies public or private.
• Concentration of wealth. Ownership of and profits from successful enterprises tend to be dispersed and diversified -particularly in voucher privatization. The availability of more investment vehicles stimulates capital markets and promotes liquidity and job creation.
• Political influence. Nationalized industries are prone to interference from politicians for political or populist reasons. Examples include making an industry buy supplies from local producers (when that may be more expensive than buying from abroad), forcing an industry to freeze its prices/fares to satisfy the electorate or control inflation, increasing its staffing to reduce unemployment, or moving its operations to marginal constituencies.
• Profits. Corporations exist to generate profits for their shareholders. Private companies make a profit by enticing consumers to buy their products in preference to their competitors' (or by increasing primary demand for their products, or by reducing costs). Private corporations typically profit more if they serve the needs of their clients well. Corporations of different sizes may target different market niches in order to focus on marginal groups and satisfy their demand. A company with good corporate governance will therefore be incentivized to meet the needs of its customers efficiently.
• Job gains. As the economy becomes more efficient, more profits are obtained and no government subsidies and less taxes are needed, there will be more private money available for investments and consumption and more profitable and better-paid jobs will be created than in the case of a more regulated economy.^{[15][unreliable source?]}

Opposition[link]

This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (July 2011)

Opponents of certain privatizations believe that certain public goods and services should remain primarily in the hands of government in order to ensure that everyone in society has access to them (such as law enforcement, basic health care, and basic education). There is a positive externality when the government provides society at large with public goods and services such as defense and disease control. Some national constitutions in effect define their governments' "core businesses" as being the provision of such things as justice, tranquility, defense, and general welfare. These governments' direct provision of security, stability, and safety, is intended to be done for the common good (in the public interest) with a long-term (for posterity) perspective. As for natural monopolies, opponents of privatisation claim that they aren't subject to fair competition, and better administrated by the state. Likewise, private goods and services should remain in the hands of the private sector.

Some^[who?] would also point out that privatizing certain functions of government might hamper coordination, and charge firms with specialized and limited capabilities to perform functions which they are not suited for. In rebuilding a war torn nation's infrastructure, for example, a private firm would, in order to provide security, either have to hire security, which would be both necessarily limited and complicate their functions, or coordinate with government, which, due to a lack of command structure shared between firm and government, might be difficult. A government agency, on the other hand, would have the entire military of a nation to draw upon for security, whose chain of command is clearly defined. Opponents would say that this is a false assertion: numerous books refer to poor organization between government departments (for example the Hurricane Katrina incident).

Although private companies will provide a similar good or service alongside the government, opponents of privatization are careful about completely transferring the provision of public goods, services and assets into private hands for the following reasons:

• Performance. A democratically elected government is accountable to the people through a legislature, Congress or Parliament, and is motivated to safeguarding the assets of the nation. The profit motive may be subordinated to social objectives.
• Improvements. the government is motivated to performance improvements as well run businesses contribute to the State's revenues.
• Corruption. Government ministers and civil servants are bound to uphold the highest ethical standards, and standards of probity are guaranteed through codes of conduct and declarations of interest. However, the selling process could lack transparency, allowing the purchaser and civil servants controlling the sale to gain personally.
• Accountability. The public does not have any control or oversight of private companies.
• Civil-liberty concerns. A democratically elected government is accountable to the people through a parliament, and can intervene when civil liberties are threatened.
• Goals. The government may seek to use state companies as instruments to further social goals for the benefit of the nation as a whole.
• Capital. Governments can raise money in the financial markets most cheaply to re-lend to state-owned enterprises.
• Strategic and Sensitive areas. Governments have chosen to keep certain companies/industries under public control because of their strategic importance or sensitive nature.
• Cuts in essential services. If a government-owned company providing an essential service (such as the water supply) to all citizens is privatized, its new owner(s) could lead to the abandoning of the social obligation to those who are less able to pay, or to regions where this service is unprofitable.
• Natural monopolies. Privatization will not result in true competition if a natural monopoly exists.
• Concentration of wealth. Profits from successful enterprises end up in private, often foreign, hands instead of being available for the common good.
• Political influence. Governments may more easily exert pressure on state-owned firms to help implementing government policy.
• Downsizing. Private companies often face a conflict between profitability and service levels, and could over-react to short-term events. A state-owned company might have a longer-term view, and thus be less likely to cut back on maintenance or staff costs, training etc., to stem short term losses. Many private companies have downsized while making record profits.
• Profit. Private companies do not have any goal other than to maximize profits. A private company will serve the needs of those who are most willing (and able) to pay, as opposed to the needs of the majority, and are thus anti-democratic. The more necessary a good is, the lower the price elasticity of demand, as people will attempt to buy it no matter the price. In the case of price elasticity of demand is zero (perfectly inelastic good), demand part of supply and demand theories does not work.
• Privatization and Poverty. It is acknowledged by many studies that there are winners and losers with privatization. The number of losers —which may add up to the size and severity of poverty—can be unexpectedly large if the method and process of privatization and how it is implemented are seriously flawed (e.g. lack of transparency leading to state-owned assets being appropriated at minuscule amounts by those with political connections, absence of regulatory institutions leading to transfer of monopoly rents from public to private sector, improper design and inadequate control of the privatization process leading to asset stripping.^[16]
• Job Loss. Due to the additional financial burden placed on privatized companies to succeed without any government help, unlike the public companies, jobs could be lost to keep more money in the company.

Notable examples[link]

The largest privatization in history^{[citation needed]} involved Japan Post. It was the nation's largest employer and one third of all Japanese government employees worked for Japan Post. Japan Post was often said to be the largest holder of personal savings in the world.

Japan Post was thought to be inefficient and a source for corruption. In September 2003, Prime Minister Junichiro Koizumi's cabinet proposed splitting Japan Post into four separate companies: A bank, an insurance company, a postal service company, and a fourth company to handle the post offices as retail storefronts of the other three.

After the Upper House rejected privatization, Koizumi scheduled nationwide elections for September 11, 2005. He declared the election to be a referendum on postal privatization. Koizumi subsequently won this election, gaining the necessary supermajority and a mandate for reform, and in October 2005, the bill was passed to privatize Japan Post in 2007.^[17]

Nippon Telegraph and Telephone's privatization in 1987 involved the largest share-offering in financial history at the time.^[18] 15 of the world's 20 largest public share offerings have been privatizations of telecoms.^[18]

The United Kingdom's largest public-share offerings were privatizations of British Telecom and British Gas during the 1980s under the Conservative government of Margaret Thatcher, when many state-run firms were sold off to the private sector. This attracted very mixed views from the public and parliament, and even a former Conservative prime minister, Harold Macmillan, was critical of the policy; likening it to "selling the family silver".^[19]There were around 3,000,000 shareholders in Britain when Thatcher took office in 1979, but the subsequent sale of state-run firms saw the level of shareholders double to 6,000,000 by 1985 and by the time of her resignation as prime minister in 1990 there were more than 10,000,000 shareholders in Britain.^[20]

The largest public-share offering in France was France Telecom.

Egypt undertook widespread privatization under President Hosni Mubarak. After his overthrow in the 2011 revolution, the association of the newly private businesses with the crony capitalism of the old regime along with the new look at long-festering labor and police-state issues have led to calls for re-nationalization.^[21]

See also[link]

• Corporatization
• Deregulation
• Marketization
• Private sector development
• Special Economic Zone

Notes[link]

References[link]

• Alexander, Jason. 2009. Contracting Through the Lens of Classical Pragmatism: An Exploration of Local Government Contracting. Applied Research Project. Texas State University. http://ecommons.txstate.edu/arp/288/.
• Dovalina, Jessica. 2006. Assessing the Ethical Issues Found in the Contracting Out Process. Applied Research Project. Texas State University. http://ecommons.txstate.edu/arp/108/.
• Segerfeldt, Fredrik. 2006. Water for sale: how business and the market can resolve the world’s water crisis. Stockholm Network. http://www.stockholm-network.org/downloads/events/d41d8cd9-Amigo%20Segerfeldt.pdf
• Bernard Black et al., 'Russian Privatization and Corporate Governance: What Went Wrong? (2000) 52 Stanford Law Review 1731

Unindexed

• David T. Beito, Peter Gordon, and Alexander Tabarrok (editors); foreword by Paul Johnson (2002). The voluntary city: choice, community, and civil society. Ann Arbor: University of Michigan Press/The Independent Institute. ISBN 0-472-08837-8. 
• Bel, Germà (2006), "The coining of `privatisation´and Germany's National Socialist Party", Journal of Economic Perspectives 20(3), 187-194
• Clarke, Thomas (ed.) (1994) "International Privatisation: Strategies and Practices" Berlin and New York: Walter de Gruyter, ISBN 3-11-013569-8
• Clarke, Thomas and Pitelis, Christos (eds.) (1995) "The Political Economy of Privatisation" London and New York: Routledge, ISBN 0-415-12705-X
• Juliet D’Souza, William L. Megginson (1999), "The Financial and Operating Performance of Privatised Firms during the 1990s", Journal of Finance August 1999
• von Hayek, Friedrich, (1960) The Constitution of Liberty
• Roger L. Kemp, PhD, "Privatization: The Provision of Public Services by the Private Sector," McFarland & Co., Jefferson, NC, USA; and London, UK., 2007.
• Kosar, Kevin R. (2006), "Privatisation and the Federal Government: An Introduction", Report from the Congressional Research Service
• Mayer, Florian (2006) Vom Niedergang des unternehmerisch tätigen Staates: Privatisierungspolitik in Großbritannien, Frankreich, Italien und Deutschland, VS Verlag, Wiesbaden, ISBN 3-531-14918-0
• Megginson and Netter, From state to market: A survey of empirical studies on privatization, Journal of Economic Literature 39(2), June 2001, 321-89.
• Onses, Richard (2004). Benchmarking Privatization: the building of privatization index using fuzzy logic. Valladolid: International Conference on Modeling and Simulation. ISBN 84-688-7867-7. 
• Onses, Richard (2004). The privatization leaders guide. e-privatization.com publication. ISBN 84-607-9613-2. 
• Nico Perrone (2002), Economia pubblica rimossa, Milan, Giuffrè ISBN 88-14-10088-8
• Smith, Adam (1776) The Wealth of Nations
• Jeb Sprague, 2007. Haiti: Workers Protest Privatisation Layoffs. Inter Press Service.
• Stiglitz, Joseph Globalization and its Discontents
• von Weizsäcker, Ernst, Oran Young, and Matthias Finger (editors): Limits to Privatisation. Earthscan, London 2005 ISBN 1-84407-177-4
• Wolin, Sheldon S. (2008) Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism (Princeton University Press, 2008). ISBN 978-0-691-13566-3 (Trad. esp.: Democracia S. A., Buenos Aires/Madrid, Katz editores S.A, 2008, ISBN 978-84-96859-46-3)
• Zullo, Roland. (2009). Does Fiscal Stress Induce Privatization? Correlates of Private and Intermunicipal Contracting, 1992-2002. Governance 22.3 (July): 459-481.

External links[link]

Look up privatization in Wiktionary, the free dictionary.

• In the Public Interest is a Resource Center on privatization and responsible contracting.
• Privatization's Rise from the Dean Peter Krogh Foreign Affairs Digital Archives
• Reports of the Public Services International Research Unit at the University of Greenwich Research database with many articles on the effects of privatization
• Parker, David. "Privatisation ten years on : a critical analysis of its rationale and results". Cranfield University, School of Management. http://dspace.lib.cranfield.ac.uk/handle/1826/606. 
• Privatization Blog is a resource dedicated to recent developments in privatization.

Ron Paul
Member of the U.S. House of Representatives from Texas's 14th district
Incumbent
Assumed office January 3, 1997
Preceded by	Greg Laughlin
Member of the U.S. House of Representatives from Texas's 22nd district
In office January 3, 1979 – January 3, 1985
Preceded by	Robert Gammage
Succeeded by	Tom DeLay
In office April 3, 1976 – January 3, 1977
Preceded by	Robert Casey
Succeeded by	Robert Gammage
Personal details
Born	Ronald Ernest Paul (1935-08-20) August 20, 1935 (age 76) Pittsburgh, Pennsylvania, U.S.
Political party	Republican Party (1976–1988, 1988–present)
Other political affiliations	Libertarian Party (1988 election)
Spouse(s)	Carol Wells
Children	Ronnie Lori Rand Robert Joy
Alma mater	Gettysburg College (B.S.) Duke University (M.D.)
Religion	Southern Baptist
Signature
Website	Congressional website Campaign website
Military service
Service/branch	United States Air Force Texas Air National Guard
Years of service	1963–1965 1965–1968
Rank	Captain[1]
This article is part of a series about Ron Paul 2012 presidential campaign 2008 presidential campaign 1988 presidential campaign Political positions · Electoral history List of legislation sponsored by Ron Paul Ron Paul newsletters Ron Paul bibliography

Ronald Ernest "Ron" Paul (born August 20, 1935) is an American politician who has been the U.S. Representative for Texas's 14th congressional district, which includes Galveston, since 1997, and a three-time candidate for President of the United States, as a Libertarian in 1988 and as a Republican in 2008 and currently 2012. He is an outspoken critic of American foreign and monetary policies, including the Military–industrial complex and the Federal Reserve, and is known for his libertarian-leaning views, often differing from his own party on certain issues.

A native of Pittsburgh, Pennsylvania, Paul is a graduate of Gettysburg College and Duke University School of Medicine, where he earned his medical degree. He served as a medical officer in the United States Air Force from 1963 until 1968. He worked as an obstetrician-gynecologist from the 1960s to the 1980s, delivering more than 4,000 babies. He became the first Representative in history to serve concurrently with a child in the Senate when his son Rand Paul was elected to the United States Senate for Kentucky in 2010.^[2]

Ron Paul has been an active writer and publisher since the late 1970s, when he created the first of several newsletters bearing his name. He has published many books, beginning with The Case for Gold (1982) and including Liberty Defined: 50 Essential Issues That Affect Our Freedom (2011), End The Fed (2009), The Revolution: A Manifesto (2008), Pillars of Prosperity (2008), and A Foreign Policy of Freedom: Peace, Commerce, and Honest Friendship (2007). Paul has been characterized as the "intellectual godfather" of the Tea Party movement.^[3][4]

On July 12, 2011, Paul announced that he would forego seeking another term in Congress in order to focus on his presidential bid.^[5] On May 14, 2012, Paul announced that he would not be competing in any other Presidential primaries, though he is still competing for delegates in states where the primary election have already been held.^[6]

Early life, education, and medical career[link]

Ronald Ernest Paul was born on August 20, 1935, in Pittsburgh,^[7] the son of Howard Caspar Paul, who ran a small dairy company, and Margaret (née Dumont) Paul. His paternal great-grandparents emigrated from Germany, and his mother was of German and Irish ancestry.^[8][9]

As a junior at suburban Dormont High School, he was the 220-yard dash state champion.^[10] He graduated from Gettysburg College with a B.S. degree in Biology in 1957.^[10]

Paul earned a Doctor of Medicine degree from Duke University's School of Medicine in 1961, and completed his medical internship at the Henry Ford Hospital in Detroit and his residency in obstetrics and gynecology at Magee-Womens Hospital in Pittsburgh.^[11] Paul served as a flight surgeon in the United States Air Force from 1963 to 1965 and then in the United States Air National Guard from 1965 to 1968.^[12]

Paul and his wife then relocated to Texas, where he began a private practice in obstetrics and gynecology.^[13] He refused to accept Medicaid or Medicare payments, but routinely lowered fees for patients who could not afford to pay.^[14][15]

Early congressional career (1976–1985)[link]

While still a medical resident in the 1960s, Paul was influenced by Friedrich Hayek's The Road to Serfdom, which caused him to read many publications by Ludwig von Mises and Ayn Rand. He came to know economists Hans Sennholz and Murray Rothbard well, and credits to them his interest in the study of economics.^[16]

When President Richard Nixon "closed the gold window" by ending American participation in the Bretton Woods System, thus ending U.S. dollar's loose association with gold^[16] on August 15, 1971, Paul decided to enter politics^[17] and became a Republican candidate for the United States Congress.^[18]

Elections[link]

In 1974, incumbent Robert R. Casey defeated him for the 22nd district. President Gerald Ford later appointed Casey to direct the Federal Maritime Commission, and Paul won an April 1976 special election to the vacant office.^[19] Paul lost the next regular election to Democrat Robert Gammage by fewer than 300 votes (0.2%), but defeated Gammage in a 1978 rematch, and was reelected in 1980 and 1982.^[20] Gammage underestimated Paul's popularity among local mothers: "I had real difficulty down in Brazoria County, where he practiced, because he'd delivered half the babies in the county. There were only two obstetricians in the county, and the other one was his partner."^[21]

Tenure[link]

Paul has served in Congress three different periods: first from 1976 to 1977, after he won a special election, then from 1979 to 1985, and finally since 1997.

In his early years, Paul served on the House Banking Committee, where he blamed the Federal Reserve for inflation and spoke against the banking mismanagement that resulted in the savings and loan crisis.^[22][8] Paul argued for a return to the gold standard maintained by the US from 1873-1933, and with Senator Jesse Helms convinced the Congress to study the issue.^[16] He spoke against the reinstatement of registration for the military draft in 1980, in opposition to President Jimmy Carter and the majority of his fellow Republican members of Congress.^[23]

During his first term, Paul founded the Foundation for Rational Economics and Education (FREE), a non-profit "think tank" dedicated to promoting principles of limited government and free-market economics.^[24]

Paul proposed term-limit legislation multiple times, while himself serving four terms in the House of Representatives.^[23] In 1984, he decided to retire from the House in order to run for the U.S. Senate, complaining in his House farewell address that "Special interests have replaced the concern that the Founders had for general welfare.... It's difficult for one who loves true liberty and utterly detests the power of the state to come to Washington for a period of time and not leave a true cynic."^[25][26] (On Paul's departure from the House, his congressional seat was assumed by former state representative Tom DeLay, who would eventually become Speaker of the House.)^[27]

Committee assignments[link]

• House Banking Committee

1984 U.S. Senate election[link]

In 1984, Paul campaigned for the U.S. Senate, but lost the Republican primary to Phil Gramm, who had switched parties the previous year from Democrat to Republican.^[28] Another candidate of the senatorial primary was Henry Grover, a conservative former state legislator who had lost the 1972 gubernatorial general election to the Democrat Dolph Briscoe, Jr.

Inter-congressional years[link]

1985–1997[link]

Following the loss of the 1984 senate race, Paul returned to his obstetrics practice and took part in a number of other business ventures.^[8][29] Along with his former congressional chief of staff, Lew Rockwell, Paul founded a for-profit enterprise, Ron Paul & Associates, Inc. (RP&A) in 1984, with Paul serving as president, Rockwell as vice president, Paul's wife Carol as secretary, and daughter Lori Pyeatt as treasurer.^[30] The company published a variety of political and investment-oriented newsletters including Ron Paul Freedom Report and Ron Paul Survival Report, and by 1993 was generating revenues in excess of $900,000.^[31][32]

Paul also co-owned a mail-order coin dealership, Ron Paul Coins, for twelve years with Burt Blumert, who continued to operate the dealership after Paul resumed office in 1996.^[33][34] Paul spoke multiple times at the American Numismatic Association's 1988 convention.^[33] He worked with his Foundation for Rational Economics and Education on such projects as establishing the National Endowment for Liberty, producing the At Issue public policy series that was broadcast on the Discovery Channel and CNBC,^[24] and continuing publication of newsletters.

1988 presidential campaign[link]

Paul resigned from the Republican Party in 1987 and launched a bid for the presidency running on the Libertarian Party ticket. At the 1987 Libertarian National Convention, the party was split between a Conservative and Liberal wing. Paul represented the conservative wing, which was successful in fundraising, while the liberal wing claimed to have received ten times more (and more favorable) press coverage.^{[citation needed]} Paul argued, "Pro-life libertarians have a vital task to perform: to persuade the many abortion-supporting libertarians of the contradiction between abortion and individual liberty; and to sever the mistaken connection in many minds between individual freedom and the 'right' to extinguish individual life."^[35][36]

In the 1988 presidential election, Paul was on the ballot in 46 States,^[37] scoring third in the popular vote with 432,179 votes (0.5%).^[38] Paul was kept off the ballot in Missouri, and received votes there only when written in, due to what the St. Louis Post-Dispatch termed a "technicality".^[39]

According to Paul, his presidential campaign was about more than obtaining office; he sought to promote his libertarian ideas, often to school and university groups regardless of vote eligibility. He said, "We're just as interested in the future generation as this election. These kids will vote eventually, and maybe, just maybe, they'll go home and talk to their parents."^[37]

Paul considered campaigning for President during 1992,^[40] but instead chose to endorse Pat Buchanan that year, and served as an adviser to Buchanan's Republican presidential primary campaign against incumbent President George H. W. Bush.^[41]

Later congressional career (1997–present)[link]

An earlier congressional portrait of Paul

Elections[link]

1996 campaign

During 1996, Paul was re-elected to Congress after a difficult campaign. The Republican National Committee endorsed incumbent Greg Laughlin in the primary; Paul won with assistance from baseball pitcher, constituent, and friend Nolan Ryan, tax activist and publisher Steve Forbes^[8] and conservative commentator Pat Buchanan (both of whom had had presidential campaigns that year). Paul narrowly defeated Democratic attorney Charles "Lefty" Morris in the fall election, despite Morris' criticism over controversial statements in several newsletters that Ron Paul published.

1998–present

In 1998 and 2000, Paul defeated Loy Sneary, a Democratic Bay City, Texas, rice farmer and former Matagorda County judge.^[17] In the 2008 Republican primary,^[42] he defeated Friendswood city councilman Chris Peden,^[43] with over 70 percent of the vote^[44] and ran unopposed in the general election.^[45] In the 2010 Republican primary, Paul defeated three opponents with 80 percent of the vote.^[46]

On July 12, 2011, Paul announced that he would not seek re-election to the House in order to pursue the 2012 presidential election.^[47][48]

Tenure[link]

Legislation

Of the 620 bills that Paul had sponsored through December 2011, over a period of more than 22 years in Congress, only one had been signed into law – a lifetime success rate of less than 0.3%.^[49] The sole measure authored by Paul that was ultimately enacted allowed for a federal customhouse to be sold to a local historic preservation society (H.R. 2121 in 2009).^[49]

By amending other legislation, he has helped prohibit funding for national identification numbers, funding for federal teacher certification,^[17] International Criminal Court jurisdiction over the U.S. military, American participation with any U.N. global tax, and surveillance of peaceful First Amendment activities by citizens.^[50]

Affiliations

Paul was honorary chairman of, and is a member of the Republican Liberty Caucus, a political action committee that describes its goal as electing "liberty-minded, limited-government individuals".^[51] He is an initiating member of the Congressional Rural Caucus, which deals with agricultural and rural issues, and the 140-member Congressional Wildlife Refuge Caucus.^[52]

Committee assignments[link]

Rep. Paul serves on the following committee and subcommittees.^[53]

• Committee on Financial Services
  • Subcommittee on Domestic Monetary Policy and Technology (Chairman)
  • Subcommittee on International Monetary Policy and Trade
• Committee on Foreign Affairs
  • Subcommittee on Oversight and Investigations

With the election of the 112th Congress, and a resulting GOP majority in the House, Paul became the chairman of the Subcommittee on Domestic Monetary Policy and Technology starting in January 2011.^[54]

2008 presidential campaign[link]

Ron Paul being interviewed the day of the New Hampshire primary in Manchester

2008 Republican primary campaign[link]

Paul formally declared his candidacy for the 2008 Republican nomination on March 12, 2007, on C-SPAN.^[55] Few major politicians endorsed him, and his campaign was largely ignored by traditional media.^[56] However, he attracted an intensely loyal grassroots following, in large part energized by "iconoclastic white men"^[57] interacting through internet social media.^[58][59][60] In May 2007, shortly after the first televised primary debates, the blogs search engine site Technorati.com listed Paul's name as the term most frequently searched for;^[58] and Paul's campaign claimed that Paul had more YouTube channel subscribers than Barack Obama or any other candidate for president.^[61] For a candidate who had had relatively low national name recognition prior to entering the race, Paul did surprisingly well in fundraising, taking in more money than any other Republican candidate in the fourth quarter of 2007, as the primary season headed into the Iowa caucuses.^[62][63]

Despite benefiting from large numbers of campaign contributions from individual donors,^[64] and the efforts of tech-savvy supporters determined to keep his name a frequent topic of discussion on the internet,^[58] over the course of the campaign Paul was unable to translate the enthusiasm of his core supporters into large enough numbers of actual primary votes to unseat his rivals.

Paul came in 5th place in both the January 4 Iowa caucuses (10% of votes cast)^[65] and the January 8 New Hampshire primary (8%).^[66] With the exception of the Nevada caucuses January 19, where he came in 2nd (14%) behind Romney (51%), he did little better through the rest of January: Michigan 4th (6%), South Carolina 5th (4%), Florida 5th (3%). On SuperTuesday, February 5, he placed 4th in almost every state, generally taking in a mere 3–6% of the votes (although he did better in the mountain states of North Dakota (21%, 3rd place) and Montana (25%, 2nd place).^[67][68]

By March, front-runner John McCain had secured enough pledged delegates to guarantee that he would win the nomination, and Romney and Huckabee had both formally withdrawn from the race. Paul, who had won no state primaries, knew that it was now mathematically impossible for him to win the nomination, as he had captured only 20^[69] – 40 pledged delegates compared to more than 1,191 for McCain, yet he refused to concede the race and said that it was unlikely that he would ultimately endorse McCain.^[70][71][72] Over the next few weeks, Paul's supporters clashed with establishment Republicans at several county and state party conventions over state party rules, the party platforms, and selection of delegates for the national convention.^[73][74][75] In one of the more dramatic moments, Nevada's state party leaders, outmaneuvered by Paul supporters at the state nominating convention, resorted to the highly unusual measure of prematurely and abruptly shutting down the convention before selecting national delegates, with a plan to reconvene at a later date.^[76][77]

On June 12, 2008, Paul finally withdrew his bid for the Republican nomination. He later said that one of the reasons he did not run in the general election as a third-party candidate, after losing the primary election, was that, as a concession to gain ballot access in certain states, he had signed legally-binding agreements to not run a third-party campaign if he lost the primary.^[78] Some of the $4 million remaining campaign contributions was invested into the new political action and advocacy group called Ron Paul's Campaign for Liberty.^[79]

Refusal to endorse the Republican candidate[link]

At a September 10, 2008, press conference, Paul announced his general support of four third-party candidates: Cynthia McKinney (Green Party); Bob Barr (Libertarian Party); Chuck Baldwin (Constitution Party); and Ralph Nader (independent). He said that each of them had pledged to adhere to a policy of balancing budgets, bringing the troops home, defending privacy and personal liberties, and investigating the Federal Reserve. Paul also said that under no circumstances would he be endorsing either of the two dominant parties' candidates (McCain – Republican Party, or Obama – Democratic Party) because there were no real differences between them, and because neither of them, if elected, would seek to make the fundamental changes in governance that were necessary. He urged instead that, rather than contribute to the “charade” that the two-party election system had become, the voters support the third-party candidates as a protest vote, to force change in the election process.^[80][81] Later that same day, Paul gave a televised interview with Nader saying much the same again.^[82]

Two weeks later, "shocked and disappointed" that Bob Barr (the Libertarian candidate) had pulled out of attending the press conference at the last minute and had admonished Paul for remaining neutral and failing to say which specific candidate Paul would vote for in the general election, Paul released a statement saying that he had decided to endorse Chuck Baldwin, the Constitution Party candidate, for president.^[83]

In the November 2008 general election, Paul received 41,905 votes despite not actively campaigning.^[84][85]

2012 presidential campaign[link]

Ron Paul during his 2012 presidential election campaign in Las Vegas, Nevada.

Paul is a candidate for the Republican Party nomination for President of the United States in the 2012 election.

He won several early straw polls for the 2012 Republican presidential nomination ^[86] and in late April, 2011, he formed an official exploratory committee.^[87][88] He participated in the first Republican presidential debate on May 5, 2011.^[89] and on May 13, 2011, Paul formally announced his candidacy in an interview on ABC's Good Morning America.^[90] He placed second in the 2011 Ames Straw Poll, missing first by 0.9%.^[91]

In December 2011, with Ron Paul's increased support, the controversy over allegedly racist and homophobic statements in several Ron Paul newsletters in the 1980s and early 1990s once again gained media attention.^[92] During this time Paul supporters asserted that he was continually ignored by the media despite his significant support, citing examples of where television news shows would fail to mention Paul in discussions of the Republican presidential hopefuls even when he was polling second.^{[93][94][95][96]}

Paul came in third in the Iowa Republican Caucus held on January 3, 2012. Out of a turnout of 121,503 votes, Paul took 26,036 (21%) of the certified votes. Rick Santorum and Mitt Romney finished in a virtual tie for first place with 25% each.^[97] In the New Hampshire Primary held on January 10, 2012, Paul received 23% of the votes and came in second after Romney's 39%.^[98]

Ron Paul's results then declined, despite the withdrawal of candidates Michele Bachmann, Jon Huntsman and Rick Perry. He had fourth place finishes in the next two primaries, on January 21st in South Carolina (with 13% of the vote^[99]) and on January 31st in Florida (where he received 7% of the vote.^{[100][101][102]})

On February 4, Paul finished third in Nevada with 18.8% of the vote.^[103] Three non-binding primaries were held on February 7th; Paul took 3rd place in Colorado^[104] and Missouri^[105] with 13% and 12% of the vote respectively. He fared better in Minnesota^[106] with 27%, finishing second to Rick Santorum.

On May 14, Paul's campaign announced that due to lack of funds he would no longer actively campaign for votes in the 11 remaining primary states, including Texas and California, that had not yet voted.^[6][107] He would, however, continue to seek to win delegates for the national party convention in the states that had already voted.

Political party identification[link]

Throughout his entire tenure in Congress, Paul has represented his district as a member of the Republican Party. However, he has frequently taken positions in direct opposition to the other members and the leadership of the party, and he has sometimes publicly questioned whether he really belonged in the party.

He had been a lifelong supporter of the Republican Party by the time he entered politics in the mid 1970s.^[108] He was one of the first elected officials in the nation to support Ronald Reagan's presidential campaign,^[109] and he actively campaigned for Reagan in 1976 and 1980.^[110] After Reagan's election in 1980, Paul quickly became disillusioned with the Reagan administration's policies. He later recalled being the only Republican to vote against Reagan budget proposals in 1981,^[111][112] aghast that "in 1977, Jimmy Carter proposed a budget with a $38 billion deficit, and every Republican in the House voted against it. In 1981, Reagan proposed a budget with a $45 billion deficit – which turned out to be $113 billion – and Republicans were cheering his great victory. They were living in a storybook land."^[109] He expressed his disgust with the political culture of both major parties in a speech delivered in 1984 upon resigning from the House of Representatives to prepare for a (failed) run for the Senate, and he eventually apologized to his Libertarian friends for having supported Reagan.^[111]

Wikisource has original text related to this article: Ron Paul's 1987 Resignation Letter to the RNC

By 1987, Paul was ready to sever all ties to the Republican Party, as he explained in a blistering resignation letter: "Since [1981] Ronald Reagan and the Republican Party have given us skyrocketing deficits, and astoundingly a doubled national debt. How is it that the party of balanced budgets, with control of the White House and Senate, accumulated red ink greater than all previous administrations put together? ... There is no credibility left for the Republican Party as a force to reduce the size of government. That is the message of the Reagan years."^[110][108] A month later he announced he would seek the 1988 Libertarian Party nomination for president.

During the 1988 campaign, Paul called Reagan "a dramatic failure"^[110] and complained that "Reagan's record is disgraceful. He starts wars, breaks the law, supplies terrorists with guns made at taxpayers' expense and lies about it to the American people."^[113] Paul predicted that "the Republicans are on their way out as a major party,"^[111] and he said that, although registered as a Republican, he had always been a Libertarian at heart.^[112][111]

Paul returned to his private medical practice and managing several business ventures after losing the 1988 election; but by 1996, he was ready to return to politics, this time running on the Republican Party ticket again. He said that he had never read the entire Libertarian platform when he ran for president as a Libertarian in 1988, and that "I worked for the Libertarians on my terms, not theirs."^[114] He added that in terms of a political label he preferred to call himself "a constitutionalist. In Congress I took an oath to uphold the Constitution, not the (Republican) platform."^[114]

When he lost the Republican Party presidential primary election in 2008, Paul criticized the two major political parties, saying that there was no real difference between the parties and that neither of them truly intended to challenge the status quo. He refused to endorse the Republican Party's nominee for president, John McCain, and lent his support to third-party candidates instead.^[115][116]

In 2012 presidential campaign, during which he acknowledged it was unlikely that he would win the Republican Party nomination,^[117] Paul again asserted that he was participating in the Republican Party on his own terms, trying to persuade the rest of the party to move toward his positions rather than joining in with theirs.^[118] He expressed doubt that he would support any of his rivals should they win the nomination, warning that, “If the policies of the Republican Party are the same as the Democrat Party and they don't want to change anything on foreign policy, they don't want to cut anything, they don't want to audit the Fed and find out about monetary policy, they don't want to have actual change in government, that is a problem for me."^[119] On that same theme he said in another interview, "I would be reluctant to jump on board and tell all of the supporters that have given me trust and money that all of a sudden, I'd say, [all] we've done is for naught. So, let's support anybody at all ... even if they disagree with everything that we do."^[120]

Political positions[link]

Paul at the 2007 National Right to Life Committee Convention in Kansas City, Missouri, June 15, 2007.

Paul has been described as conservative and libertarian.^[8] According to University of Georgia political scientist Keith Poole, Paul had the most conservative voting record of any member of Congress from 1937 to 2002,^[121] and is the most conservative of the candidates seeking the 2012 Republican nomination for president,^[122] on a scale primarily measuring positions on the role of government in managing the economy – not positions on social issues or foreign policy matters.^[123] Other analyses, in which key votes on domestic social issues and foreign policy factor more heavily, have judged Paul much more moderate. The National Journal, for instance, rated Paul only the 145th most conservative member of the House of Representatives based on votes cast in 2010.^[124][125]

The foundation of Paul's political philosophy is the conviction that "the proper role for government in America is to provide national defense, a court system for civil disputes, a criminal justice system for acts of force and fraud, and little else."^[126] He has been nicknamed "Dr. No,"^[17] reflecting both his medical degree and his insistence that he will "never vote for legislation unless the proposed measure is expressly authorized by the Constitution."^[22]

Paul is a proponent of Austrian School economics; he has authored six books on the subject, and displays pictures of Austrian School economists Friedrich Hayek, Murray Rothbard, and Ludwig von Mises (as well as of Grover Cleveland)^[127] on his office wall. He regularly votes against almost all proposals for new government spending, initiatives, or taxes;^[128] he cast two thirds of all the lone negative votes in the House during a 1995–1997 period.^[17]

He has pledged never to raise taxes^[129] and states he has never voted to approve a budget deficit. Paul believes that the country could abolish the individual income tax by scaling back federal spending to its fiscal year 2000 levels;^[130][131] financing government operations would be primarily by excise taxes and non-protectionist tariffs. He endorses eliminating most federal government agencies, terming them unnecessary bureaucracies.

On April 15, 2011, Paul was one of four Republican members of Congress to vote against Rep. Paul Ryan's budget proposal, known as "The Path to Prosperity."^[132]

Paul has a consistent record as an inflation hawk, having warned of hyperinflation as far back as 1981.^[133] While Paul believes the longterm decrease of the U.S. dollar's purchasing power by inflation is attributable to its lack of any commodity backing, he does not endorse a "return" to a gold standard – as the U.S. government has established during the past – but instead prefers to eliminate legal tender laws and to remove the sales tax on gold and silver, so that the market may freely decide what type of monetary standard(s) there shall be.^[134] Since 1999, he has introduced bills into each Congress seeking to eliminate the Federal Reserve System in a single year.^{[135][136][137]}

Paul's foreign policy of nonintervention^[138] made him the only 2008 Republican presidential candidate to have voted against the Iraq War Resolution in 2002. He advocates withdrawal from the United Nations, and from the North Atlantic Treaty Organization, for reasons of maintaining strong national sovereignty.^[139]

He endorses free trade, rejecting membership in the North American Free Trade Agreement (NAFTA) and the World Trade Organization as "managed trade". He endorses increased border security and opposes welfare for illegal aliens, birthright citizenship and amnesty;^[140] he voted for the Secure Fence Act of 2006. He voted for the Authorization for Use of Military Force Against Terrorists in response to the September 11 attacks, but suggested war alternatives such as authorizing the president to grant Letters of Marque and Reprisal targeting specific terrorists. An opponent of the Iraq War and potential war with Iran, he has also criticized neoconservatism and U.S. foreign policy in the Middle East, arguing that both inadvertently cause terrorist reprisals against Americans. Paul has stated that "Israel is our close friend" and that it is not the place of the United States to "dictate how Israel runs her affairs".^[141]

Paul endorses constitutional rights, such as the right to keep and bear arms, and habeas corpus for political detainees. He opposes the Patriot Act, federal use of torture, presidential autonomy, a national identification card, warrantless domestic surveillance, and the draft. Paul also believes that the notion of the separation of church and state is currently misused by the court system: "In case after case, the Supreme Court has used the infamous 'separation of church and state' metaphor to uphold court decisions that allow the federal government to intrude upon and deprive citizens of their religious liberty."^[142]

Citing the Ninth and Tenth Amendments, Paul advocates states' rights to decide how to regulate social matters not cited directly by the Constitution. He opposes federal regulation of the death penalty^[143] (although he opposes capital punishment),^[144] of education,^[145] and of marriage, and endorsed revising the military's "don't ask, don't tell" policy to concern mainly disruptive sexual behavior (whether heterosexual or homosexual).^[146]

Paul says his years as an obstetrician led him to believe life begins at conception.^[147]

He terms himself "strongly pro-life",^[148] "an unshakable foe of abortion",^[149] and believes regulation or ban^[150] on medical decisions about maternal or fetal health is "best handled at the state level".^[143][151] His abortion-related legislation, like the Sanctity of Life Act, is intended to negate Roe v. Wade and to get "the federal government completely out of the business of regulating state matters."^[152]

Paul has stated that "The government shouldn't be in the medical business." He pushes to eliminate federal involvement with and management of health care, which he argues would allow prices to decrease due to the fundamental dynamics of a free market.^[153] Paul also opposes the federal War on Drugs,^[154] and believes the states should decide whether to regulate or deregulate drugs such as medical marijuana.^[155] He also opposes federal government influenza inoculation programs.^[156]

As a free-market environmentalist, he asserts private property rights in relation to environmental protection and pollution prevention.^{[citation needed]} He called global warming a hoax in a 2009 Fox Business interview, saying, "You know, the greatest hoax I think that has been around in many, many years if not hundreds of years has been this hoax on the environment and global warming."^[157] He acknowledges there is clear evidence of rising temperatures in some parts of the globe, but says that temperatures are cooling in other parts.^[158]

Paul was critical of the Civil Rights Act of 1964, arguing that it sanctioned federal interference in the labor market and did not improve race relations. He once remarked: "The Civil Rights Act of 1964 not only violated the Constitution and reduced individual liberty; it also failed to achieve its stated goals of promoting racial harmony and a color-blind society".^[159] Paul opposes affirmative action.^[160]

He is an outspoken proponent of increased ballot access for 3rd party candidates,^[161] but has sought to repeal the National Voter Registration Act of 1993, also known as the Motor Voter law.^[162]

Newsletters controversy[link]

Beginning in 1978, for more than two decades Paul and his associates published a number of political and investment-oriented newsletters bearing his name (Dr. Ron Paul's Freedom Report, The Ron Paul Survival Report, the Ron Paul Investment Letter, and the Ron Paul Political Report).^[163] By 1993, a business through which Paul was publishing the newsletters was earning in excess of $900,000 per year.^[163]

A number of the newsletters, particularly in the period between 1988 and 1994 when Paul was no longer in Congress, contained material that later proved highly controversial, dwelling on conspiracy theories, praising anti-government militia movements, and warning of coming race wars.^[163][164] During Paul's 1996 congressional election campaign, and his 2008 and 2012 presidential primary campaigns, critics charged that some of the passages reflected racist, anti-Semitic, and homophobic bigotry.^{[165][166][167][168][169][170][171]}

The newsletters included statements such as:

• "... I think we can safely assume that 95 percent of the black males in [Washington, DC] are semi-criminal or entirely criminal."^[166]
• "Boy, it sure burns me to have a national holiday for that pro-communist philanderer, Martin Luther King. I voted against this outrage time and time again as a Congressmen. What an infamy that Ronald Reagan approved it! We can thank him for our annual Hate Whitey Day!"^[163][172]
• "An ex-cop I know advises that if you have to use a gun on a youth [to defend yourself against armed robbery], you should leave the scene immediately, disposing of the wiped off gun as soon as possible.... I frankly don't know what to make of such advice, but even in my little town of Lake Jackson, Texas, I've urged everyone in my family to know how to use a gun in self defense. For the animals are coming."^[163][173]
• “I miss the closet. Homosexuals, not to speak of the rest of society, were far better off when social pressure forced them to hide their activities. They could also not be as promiscuous. Is it any coincidence that the AIDS epidemic developed after they came 'out of the closet,' and started hyper-promiscuous sodomy? I don't believe so, medically or morally.”^[174][175]
• “[Magic] Johnson may be a sports star, but he is dying [of AIDS] because he violated moral laws.”^[164][176]
• “[T]he criminal ‘Justice’ Department wants to force dentists to treat these Darth Vader types [people with AIDS] under the vicious Americans With Disabilities Act;" and “[W]e all have the right to discriminate, which is what freedom of association is all about, especially against killers [AIDS patients].”^[164][177]

Other passages referred to former Secretary of Health & Human Services Donna Shalala as a “short lesbian” and Martin Luther King, Jr. as a pedophile and “lying socialist satyr" – while offering praise for former Ku Klux Klan Imperial Wizard David Duke and other controversial figures.^{[163][164][174]}

When criticism of the newsletters was leveled against Paul during his 1996 congressional election, he did not deny writing the newsletters, but instead defended them and said that the material had been taken out of context.^{[165][167][166]} In later years, Paul said that the controversial material had been ghostwritten by members of a team that included 6 or 8 others and that, as publisher, not editor, he had not even been aware of the content of the controversial articles until years after they had been published.^[167][178] He eventually disavowed those passages, and stated that in 1996 his campaign advisers had thought denying authorship would be too confusing and that he had to live with the material published under his name.^[167][178] Some political commentators made note of the changing nature of the explanations he had provided over the years about his involvement with the newsletters.^{[179][180][181]}

An estranged former long-term aide of Paul, Eric Dondero, alleged that Paul was lying about his role in the production of the controversial newsletters.^[182][183] During the 2012 Republican presidential primary campaign, in January 2012, the Washington Post reported^[184] that several of Paul's former associates said that Paul had been very involved in the production of the newsletters and had allowed the controversial material to be included as part of a deliberate strategy to boost profits. Paul's former secretary said, "it was his newsletter, and it was under his name, so he always got to see the final product.... He would proof it."^[184] Paul continued to deny the accusations and to disavow the material.^[185]

Personal life[link]

Paul at a rally in Erlanger, Kentucky, on October 2, 2010, along with his son, senator Rand Paul of Kentucky, and his grandson, William Paul.

Paul has been married to Carol Wells since 1957.^[186] They met in 1952 when Wells asked Paul to be her escort to her 16th birthday party.^[187] They have five children, who were baptized Episcopalian:^[8] Ronald, Lori, Randal, Robert, and Joy. Paul's son Randal is the junior United States senator from the state of Kentucky. Raised a Lutheran, Paul later became a Baptist.^[188]

Bibliography[link]

Other contributions[link]

References[link]