Lessons from housing crisis

Financial bubbles are common, but they're still surprising – and painful – when they burst. Alex J. Pollock, past president of the Federal Home Loan Bank of Chicago, analyzed the housing bubble and the lessons to be learned from it in the May/June issue of The American:

1. A bubble is created when many people believe an asset's price, which has already risen, must keep rising, and therefore borrow to buy into it – for instance, a house.

2. Bubbles aren't caused by stupidity. A lot of people make a lot of money from them. But those who are overextended look stupid after the bubble bursts.

3. Didn't experts have computer models to analyze the risk? Yes, but computers and data only provide information, not wisdom.

4. What can be done to improve the mortgage market? Make sure borrowers know what they're getting into. He proposes a one-page form explaining the mortgage agreement in simple language..

Mr. Pollock's analysis offers a reminder of how life conducts education: The test comes first, and then we learn the lesson.

Further signs of the end: Petty family sells control of its cars

Here's further sign of the end of Civilization As We Know It: Petty Enterprises, the most fabled organization in stock car racing history, gave up control of its own operation to Boston Ventures in order to generate more capital to compete in the changed world of racing.

Since 1949, four generations of the Petty family – Lee Petty, Richard Petty, Kyle Petty and Adam Petty – thrilled audiences from coast to coast with their hard-charging driving. Richard Petty won more races than any other driver.

But victories have been rarer in recent years. “Everything has changed so much from where we first started, and as time progressed, it really got away from us,” Richard Petty told the Associated Press. “We just got behind and we tried to do it from the automotive deal, from the inside out. We finally set down and said, ‘OK, guys, if we're going to play this game, we've got to get in the game.' The only way we could get in the game was to get new moneys coming in.”

Change has come hard to the Petty organization. Last November it announced it was leaving the Level Cross community of Randolph County to move closer to the heart of NASCAR operations in Mooresville.

No telling what's next, but if Dean Smith takes a job at Duke University, we'll know the end is almost here.

Here's our vote in gov's race: debate early, debate often

Democratic gubernatorial nominee Bev Perdue has announced she will appear at five political debates with Republican nominee Pat McCrory – one in June, one in August, two in September and one in October. That's a good start, but why not more?

Mr. McCrory has said he'd appear in seven, and has called for a series of informal debates around the state so voters can see the two and hear more answers about where they stand on issues than usually results from formal debates with sound-bite answers.

It's curious that Mr. McCrory would complain about sound-bite answers, since he's pretty good at them. But he's right about the need for more debates. This race is not about Bev Perdue or Pat McCrory. It's about who the voters want to run the state the next four challenging years. It's their choice to make, and the more voters know about the candidates in this election, the better informed they'll be at the polls.

Fun costly for johns who face

jail and fines for call-girl visits

The first guilty plea from a “john” in prosecution of a local high-priced prostitution ring came Monday in federal court as a doctor from the Raleigh area admitted his involvement. He pleaded guilty to conspiring to entice an individual to cross state lines to engage in prostitution. He faces up to five years in prison and a fine of up to $250,000.

He's not the only client of the HushHush prostitution ring likely to face punishment for participation in this high-price call-girl enterprise. Said one source: “Johns are under investigation....Some have hired lawyers.”

They'll need them. They – and others – might have considered their participation to be naughty fun. But prostitution is illegal. Those who engage in it are part of an enterprise that by design is exploitive – though many prostitutes are willing participants and some make a lot of money from it.

It's usually the prostitutes who are punished for this lawbreaking. But their pimps or madams – or whatever tag goes with the arranger of these trysts – and the clients share in the lawbreaking and should face consequences, too. The Raleigh-area doctor may be one of several “johns” to find the fun was not so hush-hush, and very costly indeed.