Monday, September 29, 2008

Ferberize the Markets

Fittingly, the second blog entry on the (defeated?) bailout continues the parenting allusion. The markets, of course, are the children. They are youth replete with raw emotion in need of parental guidance. And oh the painful decisions of parenthood. How to train a child up so you will not be training for life?

Many parents are familiar with Dr. Ferber's famous book on solving sleeping problems. The issue is well known: A young child cries out in the night. Instinct tells the parent to rush in and solve whatever ails. But all that really does is stop the crying - temporarily. Everybody wakes in the night, and several times at that. People simply learn to fall back asleep. They learn it so well that most of the time they do not even realize they have woken up at all. Young children need to be Ferberized.

Ferber's method is generally referred to as letting the child "cry it out", though it is not as cruel as that sounds. It involves a series of gradually increasing wait times before entering a child's room and giving gentle reassurances that everything is okay, thus allowing a return to normal sleep. Over time, and usually it is a matter of days as opposed to weeks or months, the child has learned to go back to sleep solo.

There is no doubt the markets are crying out right now. But like a homeowner in an unaffordable house, coddling is not the answer (especially in the form of $700b of taxpayer cash). The House is seemingly taking a stand for what is right - regardless of the middle of the night wailing.

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