Exactly. Nagin's "tar baby" displeasure reminds me of the furor created when a white council member used the word "niggardly" (which means cheap, stingy or miserly) in a meeting other council members, some of whom were black, and who didn't know what the word meant, and tried to have the white person kicked out of his office.
The same thing happened to me at work. I said something about being niggardly in a meeting and everyone stared at me like I had sprouted horns. It took dictionary.com to convince them that I wasn't being racist. Even after that my boss brought me into his office and said that I still might be in trouble and that from now on I ought to avoid using words that sound even close to anything racist. Which was kinda funny because not a week later I heard some people shouting something across office referring to someone as "that cracker".