If these really are top grads, they should be able to do math. And if they do the math, they will find that the cost of living and tax situation is such that they will net less money living in California than they would in, say, Austin Texas.

I did the math. I got offers from some prominent bay area startups. They are constantly recruiting me, but none of them can offer a competitive deal on salary (and don't get me started on their "stock options" packages.)

You seem to be projecting your aspirations/desires or preferences and assuming that is the case for everyone else. I do understand that for your first job working for someone like Amazon seems glamorous, but once you've put in a couple years there (and Amazon is a particularly abusive hellhole for engineers) that wears off.

The top talent is not swayed by "name brands" but by places where they can really be innovative.

I can imagine the top MBAs from Midwest universities DO want to go work for these "name brands" because it pads you their resumes nicely.

But hackers? Hackers want to hack. They want to be on the cutting edge.

And that's no longer silicon valley. Hasn't been for awhile. It's just nobody told the people who live in silicon valley, apparently.