My reaction to what little I've learned of Rand has always been something along the lines of "Wait. Huh?" Although I hadn't managed to pinpoint my bewilderment until I read Mr. Rassmussen's essay, so thanks for linking this. The passage excerpted below really helped clarify things, I think.
Quote:
It is for Rand both right and a right for individuals to live for their own sakes. The moral standard to be followed is for each individual to live as full and as complete a human life as possible. Each individual human being is an end in him- or herself and has no higher moral purpose. One is certainly not merely a means to the ends of others.
[...] The right to liberty will not long exist in a culture that sees the pursuit of happiness (and by “happiness” she meant something more like human flourishing than merely pleasure) as either unworthy or simply amoral. Fundamentally, when it comes to culture and the institutions that constitute a social system, homo moralis is what mattered for Rand, not homo economicus.
Rand
[...] argued not only that moral knowledge is in fact possible but that such knowledge is found by an understanding of what human beings are—that is, by an appeal to human nature. She thus sought to make a deep and profound philosophical claim about the nature of ethics and to link her advocacy of the ideal of liberty to this claim. Individual rights are natural rights. Indeed, Rand can be understood in most general terms as basing her advocacy of natural rights in natural law
[.] [...] So, what one finds in Rand is (despite her atheism) an echo of an older ethical tradition whose basic note is that human nature grounds the moral order.
[...]Yet the relevance of Rand does not end here, because it is not merely the existence of a moral order that human beings desire, but something even larger—namely, the existence of an order that is open to human reason, achievement, and flourishing. Rand held that reality is intelligible and that there is nothing in principle which prevents human beings from knowing it.
As I understand it, the main points to take away from this are
A) There is an objective definition for what it means to be happy (i.e. living a good life,
eudaimonia, whatever) as a human (hence why the whole thingy is called Objectivism).
B) Obtaining this good, flourishing life is the moral standard by which we evaluate actions, etc.
C) The details and nature of this good life are accessible to human reason.
These are all plausible and perfectly self-consistent. They're also very
old premises for a moral philosophy (hence the funny Greek words in premise A). But the ancient philosophers who adopted these premises, speaking in broad generalizations here, wound up with ideal states that were very, very paternalistic. Aristotle thought moral education was a major purpose of laws, and finding every instance of of Paternalism in Plato's
Republic is an impossible task.*
And the availability of the Good life to human reason, and its being the paramount moral good by which we measure the goodness or badness of all other things seems to make a very compelling case for an educative, paternalistic state. So it's more than a bit of a puzzle when after all this Rand comes out as a minarchist.
Does she believe that every single solitary individual is capable of discovering the moral order unaided? If so, why does she need to expound upon this moral philosophy in the first place? Why is she the first to propose it? Is there some sort of "least offensive means" requirement to moral education? If the good life is the measure of good, then how can a educative, paternalistic state offend morality?
--------
*Whether Plato believed the something sufficiently similar to Rand to be included here when it comes to premise C) is unclear, he certainly believed the moral order was accessible to the reason of the more remarkable specimens of human, though certainly not the majority of them. His inclusion here may or may not be a mistake depending on the importance of epistemic populism to the argument. 
