Jesse, the central figure from whose viewpoint the story is narrated, seemingly knows that the Jim Crow South is fundamentally corrupt and unsustainable. He has participated in the dirty work of oppressing black people, beating them up in the police station, and his own unconscious behavior even in neutral situations is insensitive and reflexively racist. There is an interesting analogy between Jesse and George Orwell's persona in "Shooting an Elephant," except that Orwell is (or represents himself as) openly against the system despite his participation in it. Jesse does not have the same level of awareness, even if he senses that the establishment in the old South must come apart some day.
The worst and most brutal aspect of racism, lynching, is shown in a dreamlike sequence Jesse recalls from his childhood. The white people attend the event as if it were a picnic, despite (or because of) the sickening imagery of a man being castrated and murdered. One would think that the obvious sexual implications of the man with the knife would turn this crowd (who are all probably churchgoers) against the lynchers even if they think murder acceptable, but it doesn't. As a small boy, Jesse's understanding is limited, except that for some reason the event makes him feel more bonded with his father. And the memory of it makes him feel sexually empowered as an adult.
In the circumstances of both his childhood memories and his adult career, it would be surprising if Jesse did not have a fear of African American people, given the degree to which they have been mistreated at the hands of the whites. At the same time, like others, he's presumably powerless to do anything to correct the brutal, dysfunctional dynamic of the Jim Crow South.