I rather think that we need to be constantly mindful of the need to minimize the scope or extent of the harm, rather than prevent it. And in doing so — the argument would go — we do the best to promote good outcomes.

To boil it all down to status competition is a big mistake. I think it comes from the intersection of neo-Social-Darwinism (the strain of evo psych that emphasizes aggression and dominance to the point of celebrating it) and the academic mindset, which is big on fame and status. But the neo-Social-Darwinists are wrong, and not everyone is an academic. Basically, humans are complicated, and simple explanations for what they do are wrong.

“The Selfish Gene” by Dawkins was a life changing book for me. Why are people altruistic? Why are they suicidal?

This “animal spirits” mumbo jumbo just sounds like a sophomoric almost spiritually based understanding of why people appear to act irrationally.

Any real data that the sorts of tax structures Frank and Cook advocate (if they advocate any particular structure) would significantly endanger entrepreneurial risk-taking? I'm pretty sure my animal spirits would persevere were I to be taxed at (say) 50% at the $500K margin. So too, apparently, does Bill Gates.

I think that is only a first-order reading of animal spirit implications. In fact, it might be a little higher order to roll back and look at the role of boosterism in bubble building. A good news bias only builds bubbles higher (and more often).

I think the best answer is tell me the real news, just as soon as you can. Tell us early and let us develop skills of healthy moderation and skepticism, to prevent the extremes of public sentiment from leading us to euphorias or panics.

I rather think that we need to be constantly mindful of the need to minimize the scope or extent of the harm, rather than prevent it. And in doing so — the argument would go — we do the best to promote good outcomes.