Scared White German Shepherd

Question
Hi, I bought a 9 week old female White German Shepherd from a top breeder in the country (I did my research) in February 2005.  Her and her brother were shipped together (for comfort) on an airplane (another person received her brother, and has since told me that he is not nearly as timid as my dog).  She was frightened when we received her from the airplane.

Ever since we've gotten her (about 1.5 years ago), she has continuously been afraid of any person she does not know really well, especially children.  She initially barks at them (which I understand and accept as a German Shepherd trait to guard), but then she runs away and shakes if they bend down and slowly try to pet her (while I am bending down next to her too).  I am NOT afraid of her attacking anyone; she is NOT aggressive.  

We live on an active street (many pedestrians) and she has a hard time simply walking down the street (too much action?).  She would pull me all the way home if I would let her- I don't let her.  She is fine walking on any other street with fewer people, but once we return to our busier one, she freaks out and pulls.
 
We had our windows open and she could hear children outside with those poppers that are thrown on the ground to make a slight pop (not even a loud firework!) and she tried to run to the back room.  We made her sit with us and she began shaking.  We did not let her retreat until she would sit there without shaking as much.       

She has been around/socialized with many people; she goes to work with my boyfriend and sees at least 10 people every day.  It takes her about a dozen times of meeting someone before she finally does not bark at or is not scared of.  
I've read and try to follow not "babying" her and saying things like "it's ok" when she is scared; to be more stern and say "no" when she shows that type of behavior.  Is there anything else that I can do?  She has already been to dog obedience classes with other dogs (she loves other dogs).  Thanks for any advice.  

Answer
Hi, did you meet the parents?  What you have is a fear aggressive dog (even though she isn't really aggressive, if pinned in a corner, she probably could be out of fear).  This sometimes can be genetic, and just because her brother doesn't show it doesn't mean it didn't come from her parents or grandparents.  In fact some things can actually skip generations so checking out the parents doesn't always help as much as checking out the grandparents.  Also, how have the other siblings turned out?  Has anything (besides the plane ride) tramatized her?  It could be something really minor to you but might have affected her majorly.  When you are looking at a behavioral problem like this you really have to analyze everything that has happened to the dog since day one to try and narrow down what the cause is before you can start to solve the problem (that is if you can even solve the problem, if it is genetic, then you will never be able to solve the problem).  Hope this helps,

Dawn