I think that a 40+ year old man who admits (as he has) to sharing a bed with other people's children has a serious problem of some sort. Whether or not he's actually an active child molester or not, he certainly has some serious issues evidenced by his behaviors and self-mutilation.
Now what parents would let their kids stay over with MJ? Reportedly he showers the kids with gifts, pays bills and other things from which the parents benefit as well. No doubt his generosity contributes to some parents going along with what even on the surface one might regard as questionable relationships with an adult (and rather bizarre) man. The last time such accusations arose, the family received something like $5 million or more from Jackson. Without cooperation from the parents and the alleged victim (and they all indicated they would not cooperate with any prosecution) at that time the authorities could not bring charges. (California law has since changed, specifically as a result of that incident.)
In this case it's being reported in the media that the kid's psychiatrist reported the alleged abuse to the authorities, as required by law. But for that (if that's what happened) it may well be that nothing would ever have been brought to the attention of law enforcement. It remains to be seen what the evidence turns out to be, but given the object of the investigation and the resources he has for a legal team I have to think that the authorities at least figure they have solid enough stuff to go forward with an arrest warrant.
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I think one commentator said it well this morning... "It's like watching a 45-year-long train wreck." 
) Land.