The Asian connection has a lot to do with that. Many Asian immigrants don't feel comfortable moving away from their large communities in the L.A. and San Francisco areas to other parts of the country, so they stay and make money in spite of the adverse conditions - which don't seem bad to them compared to the limited opportunity for success they would have in their own countries. If they were as willing as whites to move to Texas or Arizona, California would already be sunk.
Also, tech companies employ a lot of bright young people from other parts of the country who don't have anything to lose yet and still love the ideal of California. So the state's relative success is largely based on trickery - fool the Asians and the smart kids into thinking that the rest of the country is full of racists and anti-intellectual rednecks and you can scare them into staying and paying higher taxes than people in other parts of the country are willing to. California can probably keep this scam going for quite a while, as the Leftists in the legislature successfully pretend to be advocates of libertarian ideals in opposition the utter cronyist fools who run the California GOP and are especially adept at living down to the Left's stereotypes. But small and medium-sized business owners know the truth, so the Great Hollowing Out will continue.
Very good article; I seldom see one so well documented.