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More encouraging statistics about the economy were released yesterday: unemployment is down to only 7.6 percent, the lowest in a decade. Over the past four years, 260,000 Israelis have entered the workforce. The Bank of Israel estimates growth this year at 5.1 percent, and the standard of living is expected to rise.

In contrast to a thriving economy, the government is paralyzed. The atmosphere in the Prime Minister's Office and the Finance Ministry is like the last days of Pompeii. Senior officials will not sign anything. They say these are the government's last days and they do not want to take any risks. No decisions are being made. No taxes are being assessed. No one wants the state comptroller investigating them, nor the accountant general for that matter. Everything gThe parties have reached a basic understanding on three issues: The Histadrut is to transfer millions of shekels to municipalities whose situation is gravest in terms of delayed wages. Dinour presented the Histadrut with papers proving that the government has transferred funds for the payment of delayed wages. In addition, the government promised to set up committees to supervise over any municipality that would withhold funds from a quarter of its employees in the future.

oes through legal advisers, who pass on the queries to Attorney General Menachem Mazuz. The latter has become the de facto director general of the state.

Senior officials say these days remind them of the end of the Barak and Netanyahu governments, or even worse.

The finance minister was interrogated yesterday for seven hours on suspicion of accepting financial favors. Under such circumstances, he has no head for reforms or strength to withstand the threat of strikes. It is inhumane for him to have to hold intensive negotiations with the Histadrut labor federation and then leave for exhausting police questioning.

The prime minister is also paralyzed. As he fights to survive, Ehud Olmert spends most of his time fending off the state comptroller's investigations on the home front, on his dealings with the Small Business Authority, on the Investment Center, the house on Cremieux Street and Bank Leumi. And the Winograd Committee findings hover in the background. With no full-time prime minister or finance minister, nothing moves.

Olmert cannot even control the coalition. Every MK is already running in the upcoming primaries and cares not a whit about government policy. Cabinet decisions are not implemented. For example, the cabinet decided that th e members of the coalition would vote against Silvan Shalom's bill on negative income tax. And yet, all the coalition members on the Finance Committee voted for the bill. Because what's important is their public image. Olmert fazes them not a bit.

Another example: A law was passed in the Knesset this week subsidizing electricity at 50 percent for the poor. There was a time when such a proposal would not stand a chance. The government would have torpedoed it. Now it passes easily, with votes from both sides of the House. Populism rules.

So how is it that the economy is growing and the numbers are so good?

The answer is that the private sector has detached itself from the public sector. There, they are working and manufacturing and exporting without reference to what is happening in Jerusalem. The capital market is free, the world is open, initiative widespread, and one can manage without the government.

But not forever. Because in the end the government's paralysis will have an effect. Not making decisions will harm growth. It will impact infrastructure and non-existent reforms. A car can keep driving on its last droplets of gas, but that runs out, too, and then everything stops.