Dentists as Green Shoots

It was first mentioned on CNBC’s morning show at the beginning of March. Kelly Evans, the Wall Street reporter, was talking about the positive signs in the U.S. labor market. It is a strange time for the U.S. economy.

Unemployment levels and jobless claims are declining, everything seems fine, but it is hard to shake the lingering feel of uncertainty. You know how everybody gets excited about green shoots at the end of winter, and then it snows again? Nobody wants to jinx it, but people can’t help but hope. Kelly Evans knows about that, of course, and she had a creative way of approaching the problem. “Want to know how the economy’s doing? Ask your dentist,” she said. 

The “dentist indicator” uses the number of new patients visiting dentists. What is the reason for the increase? It shows that there are newly-employed people taking advantage of their health insurance. Reporters called up dentists from all around the States to get anecdotal evidence. Though business is not booming, there is marked improvement. That’s one for the optimists.

Aside from the obvious fun factor, why use the dentist indicator? First of all, there is uncertainty about the prospects of recovery in the short run. As is usual after crises, the lack of reliable information sends people on a hunt for green shoots. That is understandable. Secondly, it just makes good sense. People usually put off check-ups when times are hard, hoping for the best. They only treat themselves to that extra bit of caution again when they no longer need to tighten their purse strings. Thirdly, the increase in dentist check-ups is a testable hypothesis. Anybody can go out and check it scientifically. 

We had something similar at the Central Bank of Turkey in 2002 in the aftermath of our financial meltdown. We had been climbing out of a deep hole, and were pretty sure about the “expansionary fiscal contraction.” It was one of those times when I was desperately looking around for positive signs. Then I noticed that comic books for both children and adults were in print again. Isn’t that a sign of good days coming? That’s how the Zagor indicator was born. Like the dentist indicator, it was born out of frustration, that desperate search for positive indicators for long-awaited economic improvement.

Zagor is an Italian comic book created by editor and writer Sergio Bonelli back in the early 1960s. My generation grew up with it, along with Tex Willer, another Italian comic book, this one by Gian Luigi Bonelli, Sergio’s son. At the start of Turkey’s financial meltdown in 2001, comic books immediately ran out of print. They just stopped printing them in the middle of the story. 

When the times are tough, people cut out whatever they can. Comic books are right there at the top of the list. When things get better, people buy them again. That was the Zagor indicator for us at the time. We might have said, “Want to know how the economy is doing? Go ask your kids.”

At the time, the Zagor indicator solidified my belief in our expansionary fiscal contraction. But it was born out of frustration.