HIST 11B Lecture Notes - Lecture 8: Subprime Mortgage Crisis, Credit Card Interest, Consumer Protection
Document Summary
Operation bootstrap- converted into an export processing one- assembled finished manufactured products for us firms. Strong labor movement and us minimum wage laws drove capital to mexico, dominican republic and elsewhere for cheaper labor. Exception: chemicals, pharmaceuticals, electronic, and scientific equipment (section 936 tax exemption provided loophole to us firms. Low production costs and high rd used lows wages local labor and moved headquarters, patents and trademarks, to pr and shielded all revenue from federal taxes. Johnson johnson avoided paying taxes because their operations were in puerto rice. 1967, pr leader in us investment in the hemisphere; 1992, #1 source of profit for us companies in the entire world. Sect 936 repealed 2005 but permitted controlled foreign corporations (cfc) to only pay federal taxes on income brought back into the us. Were able to avert profits to other countries to make money. After 2005, there"s a decrease in investments in puerto rico. Border industrialization program (bip) in northern mexico 1965.
