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The Deep South has often been characterized as the poorest and most backward region in the United States. The Deep South is also unique in that it is the most racially diverse part of the United States and it has the powerful social history of chattel slavery. In this paper, we examine the relationship between race and poverty at the macro (rather than individual) level. Using county-level census data we examine the effects of social segregation on well-being. We find that indeed there is an extremely strong and significant relationship between the racial composition of a county and many measures of well-being (poverty, home ownership, educational attainment, infant mortality and so on). Second, our analysis tests for the effects of racial segregation for whites and African Americans separately. The poverty rate for whites varies little based on the racial composition of the county they live in whereas for African Americans, living in integrated or predominately white counties is significantly correlated with lower levels of poverty. Furthermore, the African American-white poverty gap is significantly lower in integrated and predominately white counties and significantly higher in counties that are racially segregated. Thus, our analysis demonstrates that racial segregation has a more negative and profound effect on the lives of African Americans than it does on whites. We conclude with a discussion of the illustration Hurricane Katrina provides of tins general pattern and we offer a set of suggestions for addressing this kind of structural poverty. [ABSTRACT FROM AUTHOR]