The N word has been used for centuries by white people to insult and dehumanize African people. To say it isn’t racist is the most ignorant idea because many whites still use the world in a hateful and divisive way. It also has way to many history to just up and call it not a racist word. If a white person calls me the N word they better be ready to fight because where I come from (South Carolina), that is an automatic fighting word.
When you fixate on a word as racist you are only buying into the race-baiter's promotion of racism. In generations gone by people have called each other by nick names centered on some body or facial features in derogatory ways and if they were true friends it never came to blows. While that may still be a benign practice among reasonable people, too many UNREASONABLE people today have become brainwashed by allowing others to do all their thinking for them and suddenly a word never used in anger before, is deemed 'wrong' and 'offensive.' Stop allowing Political Correctness Police to manipulate and ruin your enjoyment of life with their racist poison. Now if it'll make you feel better call me whitey, okay? I won't be offended.
The term may have been and is still used with a negative connotation today, but the word itself is simply not racist. People still use the word in conversation, especially among the African-American community. To label a word as "Racist", if one group of people say it and just a regular conversational word for another, is in and of itself discriminatory to that group of peoples.