MGMT has often been accused of writing lyrics that are deliberately obtuse. "Kids" certainly seems to fit the bill.
First of all, who is the speaker of the song and who is the "you" they are addressing? It appears to be an adult speaking to a youngster: "You were a child crawling on your knees toward it, making Momma so proud, but your voice was too loud." That your voice is "too loud" could reference the fact that one day we all outgrow our parents and somehow need to develop our own voice in the world. However, the past tense of the lyrics gives the impression that we're hearing an adult give advice to a child.
Perhaps, Ben and Andrew are in a way talking to their younger selves, trying to give themselves post-college advice on how to stay afloat in the real world. Wouldn't it be great if we could actually do that? Reach back into the past and tell yourself what to watch out for. All twenty-somethings should be told ahead of time that the end of their first major relationship is not the end of their life, that the gas will be shut off if they don't pay the bill, and that their mothers can't write sick notes to get them out of work.
As one of MGMT's bios states: "'Kids' is filled with all those college feelings: naivety, idealism, nostalgia, happiness, sadness" (source).
The biggest piece of advice in the song, by far, is "Control yourself, take only what you need from it." This message is kind of vague and can be interpreted in a number of ways. As we mentioned, this may be a reference to Shel Silverstein's book, The Giving Tree, which is about a boy who takes advantage of a selfless tree until she is reduced to a stump.
Perhaps the band's point is that the key to life is moderation: anything in excess will lead to trouble. Taking more than you need will not necessarily make you happy. In fact, it can cause big problems. MGMT has commented a lot on the excessiveness of the rock and roll life. The band's first big hit, "Time to Pretend" (an attack on the excesses of the rockstar life) shares many common themes with "Kids." Namely, don't go overboard or you will get screwed by the world. "Kids" could be seen as a warning and "Time to Pretend" as the consequence of ignoring that warning.
Next we get to the whole "family of trees wanting, to be haunted" line. What on earth does that mean? Well, it could be a simple play on "family tree," or maybe another reference to The Giving Tree. Or perhaps it's just a metaphor for what happens when a child grows up. The kid in the video was surrounded by monsters and ghouls, right? So, perhaps, this line is suggesting that all family trees have skeletons in the closet and are "haunted" by various traumas, tragedies, and secrets.
It could also mean that as a child grows up, he gets thrown out into the real world full of monsters which will inevitably haunt him and his family. And of course, it could also mean that the kid is fated to one day turn into a "monster" himself.
The song is full of sensory imagery, from visual ("we liked to watch you") to auditory ("laughing," "crying"), to tactile ("warm," "shivers"). When we're babies, most of the input we receive from the world around us is simple and sensory. MGMT's use of these kinds of images could perhaps strengthen the image of childhood in the listener's mind. "The water is warm, but it's sending me shivers," seems to almost recast the singer as the child. It's also another good example of sensory imagery. Although the baby is content in his little bath, the shivers could be foreshadowing the unpleasant feelings that lie ahead for him when he grows up. Perhaps, this is intended to show that the baby doesn't yet understand the ugliness of the world in a logical way, but feels it somehow instinctively.
The final verse is even more abstract:
The memories fade
Like looking through a fogged mirror
Decision to decisions are made
And not bought,
But I thought
This wouldn't hurt a lot.
I guess not.
This last verse seems to be about the harsh realities that accompany coming of age. The pleasant, idyllic memories of childhood fade to the point where they are blurred "like looking through a fogged mirror." Our adolescence and early adulthood can usually be summed up as a series of immature decisions that bring us pain, heartbreak, rejection, and, ultimately, growth.
The point that MGMT might be making, however, is that without all these stupid decisions and growing pains, we would never be able to learn from our mistakes. We need to mess up a little if we're to eventually turn into responsible, conscientious, mature adults. Hopefully, all our mistakes will one day help us make a worthwhile contribution to the world.