Do I wake or sleep?

I don't know if you've ever seen the movie School Ties, about a HS quarterback who's recruited by a prep school back in the '50s. He is Jewish but is counseled to keep that under wraps, so he hears a lot of good ol' '50s WASP anti-Semitism before the secret is out. At one point the other guys are arguing about it outside of his presence, and the most egregious character says something really horrible and completely classically anti-Semitic, and one of the other guys says "You're a bigot, Dillon" and he responds angrily "I resent that." What the hell? I just don't understand what all the people actually think racism IS, what constitutes that. The number of people who actually set up camps and don white hoods are pretty small.