(Not that I think any political party has a heart. The above is merely what I regard as good tactical advice, not any sort of moral statement. The purpose of political parties is to redistribute money from those that create and/or earn it, to others who do not. Lott's gaffe imperils the mission of corporate welfare.)
It's a shame that the people who Lott was appealing to - crude old time racists - have captured the term "state's rights". For it was a useful idea, that we desperately need still. But the fight over racism and discrimination in America shows an important truth about politics: people often do the wrong thing for good reasons; and people with bad ideas often ruin perfectly good ideas by mere association.
For instance, "capitalism" these days is thought of as meaning something close to "plutocracy; corporate aristocracy". In fact capitalism has nothing to do with corporations per se, and opposes plutocracy, aristocracy or any form of rule at all. Capitalism is inseparable from anarchy; any deviation from one is necessary a deviation from the other. But in the modern world the State, and the huge problems and crimes that go with it, have been associated with capitalism in part because of the people who defended the word "capitalism" - the corporate aristocrats. Their idea of "capitalism", that is, corporate welfare of various kinds, prevailed. It's not fair, but the that's politics.
Similarly, in the case in point, "state's rights" has been indelibly associated with racists, haters and murderers: the state apparachiks and lynch mobs of the South that legally and extralegally enforced Jim Crow. But "state's rights" does not mean Jim Crow; it means, in essence, "federalism" - the idea that most powers of government should not be delegated to the center. This is in fact a good idea.
Ironically, it was with the permission of the center - the Supreme Court - that Jim Crow was created.
The Plessy case erected a major obstacle to equal rights for blacks, culminating a long series of Court decisions that undermined civil rights for African Americans beginning in the 1870s, most notably the Slaughterhouse Cases, United States v. Reese, United States v. Cruikshank, and the Civil Rights Cases of 1883...The Jim Crow laws violated the right of free association. Nobody may morally tell you who to associate with, nor who to not associate with. It's your right as a human being to determine your friends, your acquaintances, and your trading partners.
With the Supreme Court's approval, southern states quickly passed laws that restricted the equal access of blacks to all kinds of public areas, accommodations, and conveyances. Local officials began posting "Whites Only" and "Colored" signs at water fountains, restrooms, waiting rooms, and the entrances and exits at courthouses, libraries, theaters, and public buildings. Towns and cities established curfews for blacks, and some state laws even restricted blacks from working in the same rooms in factories and other places of employment.
True free association would have undone Jim Crow. The market, if left unregulated, punishes private discrimination and will inevitably (though slowly) destroy it. In order to stop this process from happening, the southern states made laws to enforce segregation - thereby violating the right of free association of businesses and citizens. The price of discrimination was socialized, and so it could be sustained indefinitely.
Illiberal policy - Jim Crow - was the core of the problem. Built on it was a superstructure of private discrimination. The correct solution would have been to strike down the illiberal laws, and let the market work. (Even better would have been for the Supreme Court to have correctly enforced right from the get-go.) The capitalist solution, while moral, would have been slow to demolish the offensive superstructure. And hence the powers that were went from forced discrimination to forced association, which is just as wrong for the same reasons. This was seen as acceptable in part under a theory of mass reparations for mass injury which is illiberal, but at least reasonable. But it was also accepted simply on the basis of who was arguing for it - the victims - and who was vehemently against it - Strom Thurmond and the other bad guys. People instinctively understand that lynch mobs are evil; and that anyone associated with them is probably wrong; and that anything such evil men say is probably bad too.
And thus the perfectly good concept of states rights was tainted. Leviathan rolls on.