My thinking is that elected politicians have some freedom of policy within a "window" defined by what MM calls the "permanent government" : the bureaucracy, the unremovable congressional incumbents and the media. The day-to-day business of politics is therefore not "fake": it actually drives policy in the short term. And because particular events at particular times can have long-term effects, electoral politics has long-term significance.
However, the predictable long-term trends of politics have nothing much to do with elections and elected office-holders. They are best described as the movement of the window of policy within which politicians can move, and are controlled by other forces: what MM calls the "Hexagon".
Take an example from the UK - the market liberalisation of the first Thatcher government. Thatcher wanted these, and Callaghan didn't, and so they happened after Thatcher was elected Prime Minister in place of Callaghan in 1979. That is politics working as normal people imagine.
However, the Heath government came to power in 1970 intending many of the same reforms. It was not permitted to carry them out. The unions opposed the reforms just as they did in the 1980s, but the elected government was not permitted to crush them as Thatcher later did. By 1980 the permanent government had come to accept the necessity of reform, and moved the window to allow it. The reforms happened in 1979-83 instead of 1976-1979 because of electoral politics, but they happened in 1979-83 instead of 1970-73 because of the change in the policies of the permanent government.
There is therefore only some truth in the conventional view of politics. That truth is magnified in popular perception by a unanimous rewriting of the past. Ted Heath, having failed to implement the Selsdon programme, became its opponent, and it is now generally assumed that the only reason the reforms happened in 1979 was electoral politics. More recently in the US it is now widely assumed that Al Gore would not have invaded Iraq, despite the fact that in 2000, as far as military action overseas was a left-right issue, the left was in favour and the right against, not to mention what came after.
On top of the real party political issues, then, issues that are not decided as the result of elections are later treated by history as if they were. when the permanent government's policies are unsuccessful - such as the preservation of the economic-policy status quo of 1970s Britain, which was imposed on Heath against his will, or the invasion of Iraq, they are blamed on the politicians, who are generally slow to deny that the policies actually carried bout by "their" governments were really their policies (not wanting to look ridiculous).
Indeed, even the most intransigent of extremist, the most unlikely ever to change their mind on a subject, can be turned from one side to the other by the simple expedient of electing them to office and to the duty of defending the policies that they have opposed all their lives but cannot change. This is not hyperbole.
In that way, political questions that are determined by the permanent government become party political issues: the politicians in office defend the policies that they were forced to carry out, and the politicians in opposition have to attack the policies in order to remain relevant. It is almost beyond doubt that if the butterfly ballots of Florida had gone the other way in 2000, the Democratic party would now be the party of the Iraq War and the Republican party would be divided on whether to support or oppose it. Of course, it is quite possible that the course of the occupation may have been different in that case, but that is beyond what I can guess.
2014: dead link http://www.commondreams.org/headlines02/0213-01.htm updated to https://web.archive.org/web/20080522032238/http://www.commondreams.org/headlines02/0213-01.htm