Political Science offers one overarching paradigm of racial attitude formation and development for the South: group conflict and racial threat (Key 1949, Blumer 1958). In contrast, the theory of intergroup contact (Allport 1954) offers an interactionist prescription for alleviating prejudice formation, regardless of cause or nature. Within and outside the South, existing political research has largely discounted or ignored intergroup contact as a viable theoretical contribution. Additionally, the distinctions between prejudices (thoughts) and discrimination (behaviors) have been articulated unartfully. I develop a new structural theory of modern Southern white racism that clearly identifies the key individual-level pillars on which the institution of racism is supported. Furthermore, a secondary model also describes the central modern process of racial attitude formation as well as the process for affecting calculated behavior between races. I use data from the 2007 Racial Attitudes in America Survey as well as data from an original 2016 Dictator Game Survey Experiment to empirically test major propositions implied by the models.