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Helicopter parenting -- another possible reason for the 2008 meltdown
Capital Markets, Lifestyle
Experts still disagree on just what caused the spectacular financial meltdown in 2008. Subprime mortgages. Fraud. Greedy banks. No-nothing credit rating agencies. The list goes on and on.
Sheila Bair, former head of the Federal Deposit Insurance Corp., has another idea: Misguided and overly protective parenting techniques. Risk is essential to success. At least the right kind of risk. Risk, as she says in this riveting speech, is an essential ingredient for personal growth. But she warns that today’s parents are making their children afraid to take the right kinds of risk. Bair has a front row seat on the next generation: She is currently president of Washington College in Chestertown, Maryland.
Here’s an excerpt from what Bair had to say to the attendees on Thursday at the ENGAGE International Investment Education Symposium, sponsored by the CFA Institute in Chicago (emphasis added). You can watch the full video below.
Youngsters are often taught to avoid risk. When did childhood become so fraught with peril? “Don’t ride your bike to the park. Don’t touch that bug. don’t jump off that tire swing and we… we hand our children scripts we think they need to follow in order to succeed in life: Land the lead in the play; win the big game… score the highest grades — no matter what it takes.
Sure we want to protect our children from danger, but carried to the extreme we have instilled a sense of fear in our young people. Fear of the unknown. Fear of disappointing others. Fear of failure. I suspect many of those investment bankers on Wall Street were raised by well-meaning parents who compelled them to collect all the trappings of success, no matter the consequences.
Even as students…. you are unprepared for failure. A small setback feels like a significant defeat. They lapse into near paralysis, unable to pick themselves up. When Johnny flunks his economics exam or Mary doesn’t make the cut for the soccer team, mom and dad are just a phone call away. And what they usually hear is that mom or dad will call the professor or the coach to intervene. What they need to hear is that it’s okay; that this mishap is not going to define who they are or whether they live happy lives… they will overcome it and become stronger for it.”
Bair is president of Washington College in Maryland, and it sounds like her students are very fortunate.
Photo: Third Way Think Tank