The California economy is not going to 'fail'. You might think that from the wailing and gnashing of teeth on the part of politicians, but it won't. They're just upset that somebody has taken the punch bowl away from the giant party they were having with our money. California will go through a recession, higher unemployment, fewer government services, etc., but it's certainly not going to collapse.
We'll lose a lot of jobs to other states having lower taxes, lower costs (electricity, for one), and fewer regulatory burdens. This ought to make the eco-freaks ecstatic: fewer jobs, fewer people. At some point, the voters might wise up and elect some more busienss-friendly politicians, which would reverse these trends.
The CA economy isn't 1/7 of the country's for no good reason. The core components, inlcuding hi-tech, entertainment, aerospace, tourism and construction are all still here and 2nd to none. The underlying cause of this fiscal crisis is illegal immigration, pure and simple.
There's so much construction going on in Orange County and N. San Diego county, that, if this is a recession, I wonder what it's going to look like when the economy turns around.
The one thing you can never take away is the mountains, ocean/beaches and weather. This weekend was incredible, and for those back east watching the Raider game yesterday, yes, it really was 70 degrees and perfect at kick-off.
People will continue moving here, and business owners will continue starting businesses here, for the simple reason that this is where they want to be. (It's an old cliche about people moving back after a few years trying somewhere else.) Talk of businesses moving to NV, AZ et al typically address low-skilled positions for workers who are already in those states - technically skilled people and decision makers are staying put right here.