I used to work at a daycare center, was a teacher for 6 years, and now am a SAHM. I can tell you that around 3-4 years old boys and some girls too discover their private parts and the soothing feeling they get from their privates being stimulated in any manner (petting, rubbing, holding, and even laying on the floor and slithering like a snake--yes I have witnessed this at a daycare center.) From what my teachings and my experienced has taught me was to not make it a joke (no offense to your husband) or make the child feel embarrased in anyway. Don't make the child feel like they are doing something bad. BUT to do the holding and petting of oneself in public is unacceptable. I would just tell my sons privately in their ear "If you wish to hold yourself, you are going to need to go to the bathroom or your room and do this in private." At first, it will probably be a pain for you to be consistent and they being the age they are may even manipulate the situation a little bit. But if you say this and demand this each time you witness the behavior then soon it will catch on with your sons. I predict they will eventually save the holding for later when they are alone, and you will not longer have to deal with it. This did work for the "little slithering snake" at the daycare center. Good luck dear.