Children aren't racist per se, but they do exhibit in-group / out-group thinking. It's part of evolving in primate communities and you'll see it in most high order primates. You see it in family groups - you have a preference for those people you are related to over complete strangers. There's a good reason for that, it's part of a survival strategy.

Anti-semitism and racism are a cultural response to a falliability in our psyschological make up . It can be hacked and exploited very easily under the right conditions- see Jane Elliott's blue eyes/brown eyes experiment and the third wave experiment in Palo Alto as examples of how easily this can happen.

The argument here is not that racism should continue unchecked - instead it's about understanding that the tendency towards out-group thinking cannot be wished away. A society that simply pretends these thought processes don't happen takes its eye off the darker side of human nature. The social justice left is convinced of its own infalliable morality and that's a dangerous place to take a society.

Across the 1920s, Jewish Germans were an integral part of the Weimar republic. Think Sigmund Freud, Albert Einstein etc, there were Jewish nobel prize winners across the 1920s. Though there was a strain of anti-semitism across this period, it was supercharged by the demagogue who managed to convince the average man that the Jewish people were responsibile for everything.

A society full of people that have convinced themselves that they are the epitome of morality and don't have a bad bone in their body is a society that is easily turned by a demagogue and by group-think. If you want to erradicate racism (I don't think that's entirely possible as it's a byproduct of our hard wiring) then having a population virtue signalling their own morality isn't the way to do it. It's about individuals understanding their psychology and actively rejecting the process by which they become radicalised.

In short. Pretending doesn't help.