What the kids are tugging at like mad? (8)
I believe the answer is:
crackers
'mad?' is the definition.
(thesaurus)
I cannot understand how the remainder of the clue works.
Can you help me to learn more?
(Other definitions for crackers that I've seen before include "Crazy - (American) biscuits" , "Nutty - biscuits" , "Not being sensible" , "Round the bend" , "Yanks open these" .)