No, Jennifer, no! That's not how the joke works! I love the joke! Here is the joke:
There is a huge rivalry between Los Angeles and San Francisco, but only San Francisco knows about it.
That's it! That is the joke. I have no idea who first came up with it. Here is the explanation of the joke: people from San Francisco think there's a huge rivalry between them and Los Angeles, but that's only because San Francisco secretly knows that LA is way more important and so they dismiss it as vulgar and dumb because they feel incredibly insecure about it. People in Los Angeles, on the other hand, think San Francisco is great, a wonderful place to visit, and they love it and feel no reason to hate or fear it. So the rivalry exists solely in the minds of the San Franciscans.
That's how the joke works. It isn't really even a joke; more of an explanation. Here's Jennifer Rubin's version:
The “rivalry” between Romney and Jeb Bush is like that between San Francisco and Los Angeles. The former is so confident of its own stature that it does not know there is a rivalry. Romney is Los Angeles.
No, Jennifer, no! That is not the joke!