Tom Petters and Denny Hecker: Why We Have a Recession

The government tells us that the recession is over, and that we are witnessing a slow recovery.  Well, it's more like a depression for the millions that are still out of work, and struggling to pay the bills.  They need someone or something to blame their troubles on.  So who fits the bill?  President George W. Bush during his last months in office?  Corporations that had been living the high life, or were too bloated to realize a big fall was coming?  Jobs shipped overseas and never coming back?

Minnesotans only need two scapegoats:  Tom Petters and Denny Hecker.  Both were well-known businessmen with multi-billion dollar companies, whose worlds came crashing down when they got caught with their hands in the cookie jar.

Petters, whose empire included Polaroid, Fingerhut and Sun Country Airlines, was recently convicted by a federal jury of operating a $3.5 billion Ponzi scheme.  The counts for which he was found guilty (20 in all) included wire and mail fraud, conspiracy and money laundering.  He could be sentenced to life in prison.

Hecker declared bankruptcy last June, claiming he owed $767 million with only $18.5 million in personal assets.  He had to sell or shut down his numerous auto dealerships and a rental car chain.  Auctions have been held, putting on display for the highest bidder the excesses of Hecker's life.  And we got to know how much it'll take (financially) to keep his wife and alleged mistress happy, more than we ever needed to know.

Hecker could also be charged in Federal court (according to startribune.com) for allegedly forging documents to secure a $65 million loan from a division of Chrysler, which would have brought nearly 5000 cars of a competing brand to one of his dealerships. 

The common denomiators between Petters and Hecker are that (A) both were worth a lot of money, (B) employed thousands of people, and (C) attracted investors who believed in them so much that they were willing to part with their life savings.  When all of that goes away and the Feds come calling, those who got burned tend to demand answers.  Well, they might be getting answers, but they'll never get their money back.

We may be reveling in the misfortune of people like Petters and Hecker right now.  But that's not going to pay the bills or to get yourself a new career.  The lesson here is not to put your trust in those who promise you the moon and the stars, or else you'll end up with desert swampland.