The narrative that the Confederate flag is flown as a symbol of racism and a sign of racial tension, that is.
Brad DeLong links to a good post* at The Atlantic about a sort of social equilibrium that is emerging around the flag, and its complex history. I've long protested the idea that Southerners who display the flag are somehow expressing racial animosity, treason, or anything other than a recognition of regional identity/heritage. People who claim otherwise generally don't have much personal experience with Southerners or with instances when the flag is displayed. I've seen it displayed in a wide cross-section of cases, and while there are obviously white supremacists out there who use it too (next to the cross and the American flag, btw), the preponderance of cases have exactly zero to do with that and are used by people with no racial animosity to express.
That having been said, the flag obviously means different things to different people (the fact that it's used by white supremacists is a clear example of that!). Most importantly, it is understandably viewed by the black community as a symbol of slavery or segregation.
So that puts us in a conundrum. How do you deal with a symbol that means such dramatically different things to different people?
The best solution, in my mind, is not to display it in public venues that are supposed to represent everyone, but to allow its display privately for those who wish. That's the equilibrium that the article describes, and it's the right one. Do you think it's a travesty that your statehouse doesn't display the flag? Too bad. You have no reasonable expectation that it should particularly given the other people that the statehouse is supposed to represent.
Now, of course because to a lot of people the flag has nothing to do with racial animosity (I personally don't look at it and see it as a hateful symbol), people can use it themselves. But even here, you have to be aware of the fact that different people interpret the symbol differently. My next door neighbor and my neighbor directly across the street are black. There's no way in hell I'd display the Confederate flag in my front lawn even if I had the inclination to. Why? Because different people interpret the symbol differently and I know my neighbors would not view it as benignly even if they knew I viewed it benignly. So even private usage isn't entirely private and people should be aware of this.
Ultimately I view the article in a positive light. We're reaching a social equilibrium that isn't obsessed with racial animosity, that is starting to recognize diverse views of the flag, and that is starting to act accordingly.
I have one piece of Confederate flag memorabilia, on a pin that used to belong to my mom when she was a waitress in a bar in Blacksburg, Virginia.
*One thing the article gets wrong is it's reference to "Massive Resistance" as something that segregationists generally did starting in the forties. This isn't true. Massive Resistance was a policy specific to Virginia, and it was initiated in the 1950s by Harry Byrd (the same Byrd that David Henderson points out was not a fan of Keynesianism) in response to the Brown ruling. Massive Resistance was the decision to shut down a school system in Virginia that had the audacity to integrate despite Richmond's resistance.