Mexican migrants in the United States are sometimes referred to pejoratively as 'wetbacks'.
Notice that what he said was not only true, but informative and relevant in a discussion about racism. For details, see Bill Poser's recent entry on the Language Log.
Before we start burning Twain novels from the university library, let's all reread Frege's 'On Sense and Reference' (1892), paragraph 6, along with the First Amendment, shall we?
Update, this quote seems particularly relevant:
“Experience should teach us to be most on our guard to protect liberty when the Government’s purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.”
Justice Louis Brandeis, U.S. Supreme Court (dissenting opinion) Olmstead v. United States, 277 U.S. 438, 479, 72 L.Ed. 944, 957, 48 S.Ct. 564, 66 ALR 376 (1928)