I may be a bit late, but still...

Your view stands on two shaky pillars:
1. People act rationally
2. The political system in Israel leads to the selection of the more talented politicians to the higher posts.

As for 1., this subject has been researched in economics, where professional money managers were thought to take rational investment decisions. A few prominent irrational biases were detected, such as a difficulty in admitting mistakes and changing your opinion, a tendency to imitate others rather than think independently, inability to rationally weigh risky alternatives, and some more.

By the way, the failure of the "Conception" of the military intelligence in Tsahal just before the Yom Kippur war is an example for the way carefully selected professionals act irrationally. The irrationality in this case consists of ignoring information that will force you to change your mind.
George Soros, the legendary investor, expands about this in his "The Open Society in Danger" (can be bought in http://www.dbook.co.il).

As about no. 2.: For an efficient natural selection to occur, the political system should include certain elements, one of them being proper feedback on the actions of people - if an aspiring politician makes a mistake, he or she should pay the price. This is one of the foundations of financial markets, but is not part of the Israeli political culture. In Israel it turns out to be more important to make friends with an important "somebody".
Even if there is some selection, it probably doesn't select for the right things. The question to ask is what are the skills Israelis want their top-level politician needs to have, and what skills does the actual political system select for?

I think we do not agree on what rationality is in the context of decision making. I will be happy if you give your definition of it.

I maintain that being irrational is not the same as being unpredictable. For example, the fact that I sent you an email and not a pigeon may reflect a habit, not premeditated action. I am simply so much used to sending emails that I dind't even consider the airborne option...
This habit of mine is an emotional entity, not a logical one, still has predictable results - and can thus serve as a basis for theories.

As for the moral reading you seem to find in my second argument - it is completely not the intention. I want the political system to be efficient, not moral. Since the citizens of Israel are influenced by the actions of politicians, they deserve a good political system - one that selects for leadership those people who are masters in cheating, lying and doing dirty tricks for the benefit of Israeli citizens.
I claim that the current political system does not achieve this. Politicians are not rewarded according to their capacity to achieve national goals, but personal ones.

The correct assumption, then, is that the people holding power are there because of a talent to serve themselves, not a talent to take good decisions at the national level. I maintain that one needs different skills in these two domains.

So, if I understand you correctly, a rational person:
1. Defines goals.
2. Acts in a reasonable way in order to achieve them.

However, only in hindsight is it possible to say what was a "reasonable" way to act. When the moment comes to take a decision, many wise advisors have contradicting estimates as to the probability of different scenarios, and thus there are many possible "rational" decisions.

So, when trying to judge whether a decision is reasonable, it is necessary to consider the cognitive limitations and emotional state of the decision maker. This includes the attempt to understand the actions of politicians.

But apart from this, I can summarise my stand, that is perhaps not far from yours:
1. The goals of politicians are both personal (e.g., getting lots of power and influence) and national (e.g., the long-term survival of the state of israel).
2. Politicians set their interim goals on the national level in a different way than most people do, and are less affected by commonplace ideology.
3. They do their best to ignore their emotions and biases when taking decisions - something most businessmen also try to do.
4. Politicians use ideology as a tool to influence other people emotionally, without revealing their true goals.

As for the "good" political system - I send it as a separate comment below.

No. I don't. Ever heard about intuition? Didn't you mention "sharp political senses" before?
When brokers are asked why they bought a certain share, they often respond "gut feeling".
Or, let's take chess: How come Gary Kasparov can evaluate a chess position on the fly, but is unable to fully explain his judgement in words?
To summarize, if you cannot explain a decision unambiguously with words or symbols, it ain't fully rational.

If you are willing, I suggest we try to establish an alternative basis for a theory on how politicians act - just as an exploration.

First of all, let's separate the statesman from the politician. For an illustration of a typical politician play in your head the wonderful series "Yes, Minister" (later, "Yes, Prime Minister"). Here we have a person without any understanding in professional areas like finance, health, security - thus being unable to rationally weigh any alternatives and form a meaningful opinion. His asset is a feeling for what the public wants and what rival politicians are concocting - in other words, "sharp political senses".

The statesman, on the other hand, is somebody that has a vision, or at least an understanding of the subjects he is supposed to promote.

So, does our discussion refer to the statesman, or to the politician?

I think my usage of the words "good" and "bad" causes confusion. Instead of "good" please read "efficient" and instead of bad - "inefficient".

An efficient political system is one where the people under its rule are, in general, satisfied with the way it works and this situation is sustainable for the forseeable future.

When saying that Israelis "deserve" an efficient political system I mean that they will eventually change the present system if they are not satisifed with it. The french revolution is an extreme example of a change in a political system.

I don't care what are the goals of individual politicians. I care about the structure of the political system as a whole. A well-structured political system should force a politician to do lots of good things for the public if he (or she) wants to rise to power.

An exmaple for a system that doesn't have this property is a monarchy. A prince who heirs his father rises to power without having to do anything for the benefit of the public. This can work well when the masses have very little understanding of public affairs.

For more educated nations, democracy is a more efficient system because power depends on the approval of the people. But the people can still be partially manipluated by ideology, as you mention.

As people get wiser (and postmodernist), they start seeing beyond ideologies. This would probably lead to a change of the political system - but I will leave my speculations for later...

I hope you will stop ascribing to me any moral arguments. All I am saying is that if people judge their political system to be inefficient, they will aspire to reform it. One exmaple is the law for direct election of the prime minister - a recent change in the Israeli political system. These changes happen all the time, because people compare their country to other countries and try to draw conclusions. If enough people can benefit from a change, it may actually happen.

Of course politicians make mistakes. They often act against their own interest by ignoring crucial elements of the situation. After all, they are only human. Particles, on the other hand, don't have any interests, so they cannot be wrong.

And to end with a question: If we take the "rational politician" point of view, is democracy superior to monarchy? If all politicians will choose the same action, given the same information and the same national goals - what's the use of having an opposition?