Libertarianism and the freedom to discriminate

I'll cut to the chase. Rand Paul, as many of you know, is a libertarian who won the GOP nomination for Kentucky's US Senate seat. In an interview, he essentially said that he doesn't support some of the provisions of the Civil Rights Act of 1964. Namely, those provisions which tell private individuals that they cannot discriminate on the basis of race, gender, or ethnicity.

You can read http://liveshots.blogs.foxnews.com/2010/05/20/rand-paul-reacts-to-criticism/?test=latestnews for his exact wording.

In other words, Mr. Paul believes that individuals (outside of government) should have the freedom to discriminate. This flies in the face of affirmative action and other anti-discriminatory programs, so, understandably, he's taking quite a beating from the liberal elite.

His position is grounded in libertarianism, which, as my friend Nathan mentioned to me, is a minimalistic view of government without any of the moral or social reservations of the conservative movement.

This is where I'd like some input. Many (most?) conservatives and liberals alike are attacking Mr. Paul for his stance on private discrimination. The fact that conservatives are angered by this surprises me somewhat, though, as my friend Laura pointed out, the modern conservative movement is no longer very conservative.

A talk show host I was listening to last night made some very astute observations. He said that:

1. Liberals use government as a wedge to force social change on the population.
   
2. Conservatives use government as a tool to institute moral reforms that try and adhere to tradition.
   
3. Libertarians don't use government as a means to achieve either objective. Rather, their goal is to maximize personal freedom by limiting government as much as possible. They then allow free market principals to determine what moral or social conduct becomes the norm.

Like it or not, you've got to admit that libertarians have been stalwart allies in the fight against big government. While my gut instinct is to stand with Rand Paul on this issue, as I don't like affirmative action any more than the next person, is this really a morally acceptable stance? Should we allow people to discriminate as they see fit? Does this stance comply with Christian principles?

Related to this, I'm thinking about how our Constitution forbids the establishment of a state religion. People are free to worship as they see fit. Does this mean that people should be free to discriminate as they see fit? Is  this a valid parallel to make?

Lots of questions. Time for answers.