By Rob Christensen

News & Observer

RALEIGH — The House Bill 2 controversy was such a titanic struggle because it tapped into two deep veins of North Carolina politics — business progressivism and social conservatism.

It is hardly surprising that Charlotte business leaders helped midwife a compromise agreement to repeal HB2, the state law that banned local discrimination protections for LGBT people and required those using government facilities to use bathrooms that match the gender on their birth certificate.

Since North Carolina emerged as a leader in the South in the 1920s, the Tar Heel business community has been the political engine pushing for better roads, first-rate university and community college systems, the Research Triangle Park and well-respected cultural institutions. It also sought to create a more moderate image on race relations during the civil rights movement.

George Tindall, the eminent Southern historian at the University of North Carolina, dubbed this business progressivism.

That moderate, pro-business image — carefully constructed over decades — was jeopardized because of the backlash to HB2 created by the national boycott of corporations and the sports and entertainment industries.

But business progressivism is not the only storyline in North Carolina politics.

Alongside North Carolina’s efforts to transform itself from a poor agricultural state into a modern industrial state has been a deep-seated social conservatism. It is a conservatism rooted in North Carolina’s history as one of the most rural states in the country, situated in the Bible Belt and dominated by small towns.

Even as North Carolina moved to modernize, it has been slow to accept social change. The legislature rejected constitutional amendments to give women the right to vote in 1920 or the Equal Rights Amendment in the 1970s — often using arguments of protecting women, or warning about bathroom privacy that had an echo in the recent HB2 debate.

North Carolina was one of the last states in the country to legalize the sale of alcoholic drinks in restaurants and to create a state-run lottery.

In the 1920s, North Carolina barely defeated a measure to bar the teaching of evolution in the public schools.

The state has also not been particularly gay friendly. In a statewide referendum in 2012 — called Amendment One — voters passed a constitutional amendment banning gay marriages by a 61 to 39 percent margin. The courts declared the measure unconstitutional in 2014.

So the Republican legislature, dominated by small-town and rural legislators, thought it was on solid political ground when it passed HB2 a year ago.

The legislature approved the measure after Charlotte passed a law — like hundreds of other local governments in other states — to allow people to use the bathroom matching the gender with which they identify in public accommodations.

But the legislature’s passage of HB2 — whipped through in one day bypassing the usual procedures and public airings — proved to be perhaps the most disastrous piece of legislation in North Carolina history.

While Republicans expected dissent from gay-rights groups and from liberals, they did not expect a wall of opposition from corporate America, the NCAA, the NBA, the ACC, state and local governments and the entertainment industry.

The opposition threatened to isolate North Carolina as a pariah state, hurting efforts to recruit new industry, conventions and sporting events. But more than that, it hurt North Carolina’s brand that had been built by generations of Tar Heel leaders including Democrats such as Luther Hodges, Terry Sanford and Jim Hunt and Republicans such as Jim Holshouser and Jim Martin.

North Carolina faced a choice. It could continue to take a stand against transgender rights, but the price would be the continued loss of business expansions by the PayPals and Deutsche Banks of the world in a state that had already been hard hit as any Rust Belt state by hundreds of factory closings.

It could stand and hold up its hand and shout “Not so fast” to the sexual revolution, just as it did to women’s rights, liquor and lotteries. But it would forfeit some of the basketball culture in a college-proud state.

Political polarization, gerrymandered districts and lack of political trust made finding a solution difficult.

The NCAA’s deadline for scheduling future tournaments prodded Democratic Gov. Roy Cooper and the Republican legislative leaders to finally strike a deal last week.

But Republican leaders can also read election results. Republican former Gov. Pat McCrory would likely be beginning his second term if it weren’t for HB2. Donald Trump would not be president if he hadn’t run against politics as usual, arguing for a new emphasis on jobs.

The Associated Press estimated last week that the state stood to lose more than $3.7 billion over the next 12 years if HB2 were not repealed. North Carolina business leaders were among the most vocal supporters of the deal that did not satisfy social conservatives or gay rights advocates.

It was in keeping with the role North Carolina’s business community has most often played in the public arena. And it is in keeping with the issue that most North Carolinians probably feel most keenly about — jobs.

Rob Christensen covers politics for The News & Observer of Raleigh.