Can you elaborate on what kind of policies towards entrepreneurship are better in Alabama and Arkansas? Seems to me that SF Bay Area and Los Angeles are both flourishing entrepreneurial havens [1]. I'd argue that the culture of innovation in California outweighs any economic policies that may be adverse to entrepreneurs.
[1] http://techcrunch.com/2012/11/20/startup-genome-ranks-the-wo...
California has always been the place to "make it big". From tech to movies to the gold rush, the recent economic policies (last 30 years or so) have little to do with it.
There's clearly something positive to be gotten from investments in infrastructure and education.
California has, and always will be the gold rush state... taxes aren't going to change that.
If empiricism can't convince you, nothing can. Why even read my posts?
What was that about empiricism?
The west coast and northeast have had a hundred years to fall apart because of their terrible liberal policies. They're doing great. The south and mountain west are much less economically impressive, despite their 'business friendly' policies.
So you've explained away 2 with anecdotes superior to data. 48 to go. Get started.
Also, by crediting the gold rush 150 years ago as being more relevant to California's current-day economy than it's horrible liberal policies, you're essentially saying that the actual policies don't matter.