Paranoid style as rhetoric, not pathology
Hofstadter uses "paranoid" to name a mode of expression, not a clinical diagnosis of the people who use it. That mode combines heated exaggeration, suspiciousness and conspiratorial fantasy. What sets it apart from real paranoia is that the clinical paranoid sees a hostile world aimed at himself personally. The political paranoid sees it aimed at his nation, culture or way of life, and the threat he perceives to a whole group lets him feel his passion as selfless and patriotic.
