WASHINGTON (MarketWatch) — Whatever they may think about income inequality, Republicans certainly believe in equal opportunity when it comes to being the frontrunner for their 2012 presidential nomination.

After Rep. Michele Bachmann, Gov. Rick Perry, Herman Cain and Newt Gingrich have taken their turn, Rep. Ron Paul (R., Texas) gets his moment in the sun as favorite for the Iowa caucuses, which will provide the first real test of voter sentiment in less than two weeks.

Retiring Rep. Ron Paul gjestures toward fFormer Massachusetts governor Mitt Romney at a Republican presidential debate earlier this year.

So after years on the fringe, the man who wants to abolish the Federal Reserve and restore a monetary role for gold gets to pretend he’s mainstream, at least for a brief moment.

Already there are rumblings that a Paul victory in Iowa would “discredit” the caucuses by putting forward a candidate who is patently unelectable.

The 76-year-old congressman, who ran as a third-party candidate in 1988, is a right-wing version of Ralph Nader, and would do well to command the 2.74% of the popular vote that Nader got as a third-party candidate in the 2000 election. (Paul won 0.5% in 1988.)

But in 2008 and in this campaign, Paul has used the Republican primary contest as a platform for his ideas, and his single-minded objective of reducing government activity has won him more adherents than ever in a GOP driven by the tea-party movement.

But he will never be president, and almost certainly won’t be the Republican nominee next fall. And because he’s not running for re-election to Congress, this campaign marks Paul’s last electoral hurrah.

The purity test

Paul, in some ways, is a victim of his own success. The very purity of his ideology — which makes him such an uncharacteristically passionate politician and which gives him a special appeal to younger voters — is all right when it’s one guy out on the fringe taking a stand.

But this uncompromising purity can’t work in our type of representative democracy when it becomes mainstream.

The proof is evident in the Republican debacle on Capitol Hill this week over extending the payroll-tax cut, as intransigent tea-party congressmen cast aside the House leadership to torpedo a compromise agreed on by their Senate colleagues. Paul’s often called the intellectual godfather of the tea party, and his uncompromising insistence on smaller government has characterized this tea-party Congress.

Ron Paul won’t be president; he won’t be vice president. And if he continues his pursuit of the nomination and finds resonance with primary voters, Republicans won’t recapture the White House because former Massachusetts governor Mitt Romney, who still is most likely to be the nominee, will be too discredited by the ideological split in the party.

Libertarian Paul is pushing the pendulum too far to the right. The more success he has, the likelier it is that pendulum will come crashing back to the left.

It doesn’t help that his stone-age economics presents no real solutions to some very real problems. The so-called “Austrian School” of economics espoused by Paul is simply a dressed-up version of the Darwinian capitalism that gave us a series of severe economic crashes through the 19th and early 20th centuries, culminating in the Great Depression.

It’s no coincidence that the return to these outmoded and discredited policies, begun under President Ronald Reagan, then led to the worst recession since the Depression. And it’s a sure bet that a President Paul, or any Republican following his lead, would plunge us into a Depression just as Herbert Hoover did.

A society accustomed to the safety net created during the post-World War II period cannot accept this return to stone-age capitalism. And it doesn’t have to.

John Maynard Keynes provided a 20th-century solution to economic boom and bust. A series of Keynesians, post-Keynesians, new Keynesians and neo-Keynesians have improved on his ideas to craft policies that can serve our 21st-century global economy.

Ironically, Paul may make it possible for a Democratic president to move in that direction. By pushing the Republican Party too far back toward a primitive capitalist model, he is setting the stage for a strong reaction as that pendulum swings back.

House vote stymies payroll-tax cut

In the meantime, Paul’s finally getting his 15 minutes of national fame. He‘s neglected his House duties to pursue the presidential nomination — everyone who thought he would use his new chairmanship of the monetary policy subcommittee to bash the Fed has waited in vain for the fireworks. He didn’t even vote on the motion this week to reject the Senate compromise to extend the payroll tax cut.

The only question is how long this last burst of anti-Romney sentiment favoring Paul will last, and even if it can survive the Jan. 10 primary in New Hampshire. Long ignored by the media and visibly enjoying the new attention, the candidate will make the most of it to infuse his radical ideas into mainstream politics.

Then he will be gone. Hurrah and farewell.