I don't think New York in the 70s can be explained by its own governance alone, so I object to your characterization of New York in the 70s being the result of its own failings. The state and federal governments basically abandoned the place ("Ford to City: Drop Dead"), and something similar is happening to San Francisco as well. What a loss for the country, as the next Silicon Valley, if there is one, likely won't be in the United States.
The urban vs. rural culture war in politics has little to do with inherent value and everything to do with resource allocation in an government system that allocates highly leveraged influence to the individuals on one side.
This isn't about urban vs rural. Thinking SV is such a joke it must be run by clowns is one of the (few, but these kinds of people have more in common than you'd think) things that inner city types and people from the panhandle of any state that has a panhandle have in common.
Silicon Valley has a single major drawback, cost of living, which is downstream of land use and transportation policy that’s virtually identical throughout the country. Basically every large and growing metropolitan area in the nation sees the same relative price trends. Famous low cost alt-SV Austin has seen its Case-Schiller index move within 15% of San Jose. To argue that its governance is especially backwards or selfish and, thus, deserving of failure is to indict the entire nation.
