The Fed’s interest rate analogy to parental discipline 

It worries me that the Federal Reserve Board is apparently determined to raise interest rates. Stay with me for a moment.  This will become relevant.  You raise interest rates to slow down an overheated economy.  Our economy is actually still in the doldrums.  Sure, unemployment is down.  But, wages remain low, many people have dropped out of the labor market, public sector and private sector debt are high, and housing prices have still not recovered.  So, why raise interest rates now?  There is only one argument that makes sense:  with interest rates so low, we have no tools to respond when recession returns.  What are we going to do to stimulate the economy in the face of recession?  Cut interest rates?  We won’t have that tool.

I could go on at great length about how it’s still unwise to raise interest rates this month.  But, let me stop here and describe what this recently taught me about human behavior, parenting, and maturing.  As parents, we try to discipline our kids only enough to provide them learning-oriented correction when the misbehave.  When they are behaving well, or at least well enough, we try to give them a fair amount of freedom.

I recently thought about how this worked in my own childhood.  It did not.  My parents, particularly my mother, were so strict that they really had no way to punish me when I did something wrong.  They couldn’t ground me.  I was effectively grounded for eighteen years because my mother used guilt, intimidation, and manipulation to prevent me from leaving the house or maintaining social relationships.  They couldn’t take away my allowance.  I had no allowance.  The only tools they had were physical violence, which they did not do, or guilt, criticism, and verbal assault.  My parents, like the Federal Reserve today, had no tools left.

The lesson from this is that I think we should set broad boundaries for our kids, but be permissive within those boundaries.  That way we will be able to take away certain liberties in a reasonable way when we need to discipline our kids.

Another lesson is that my lack of freedom as a child, and my lack of logical, proportional punishment as a child, retarded my learning self-control and responsibility.  As an adolescent and adult, I often went overboard with newfound freedoms, like a dieter binging on Twinkies. I didn’t have enough experience with freedom to use it responsibly.  To paraphrase that great Jewish-American thinker, Stan Lee, with any degree of freedom comes an equal portion of responsibility.

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