It's an XK Red-27 Technique.

Some people are just racist. They've been raised in a sheltered, privileged, white-bread environment that has conditioned them to view outsiders, including the poor and ethnic minorities, as inferior. It's not just poor and underprivileged white people who harbour such despicable views about black people.
I like that this film's villain was such a loathsome POS. I would have minded that he was so despicable and lacking any ounce of pathos or depth had this been a grittier, more dramatic film, but it was a Shaft movie! Did anyone really expect social realism? Plus, like I said, even in real life spoiled rich kids who think their wealth and connections can pay their way out of the worst crimes, exist. They might not make for satisfying characters in more nuanced, three-dimensional pieces of cinema and TV, but in a genre film like this, they're perfectly, satisfyingly hateful baddies.

It was the way he was dressed when he visited Peoples. Peoples said he looked like a "duck- hunter" (which he did to a certain degree).

Bale is always convincing. He's one of the best actors of his generation, without question. Regarding being one-dimensional, you've got a point, but I misspoke when I said he was one-dimensional.
What I should have said was that his character just being overtly racist in the way that he was it didn't make sense. He's sitting at a restaurant and just decides to pick one random black guy out and yell racial insults at him, when nothing caused him to suddenly be that way? It came across as lazy writing. That's what I meant.
I actually wasn't so crazy about the prison scene, but I don't remember the duck hunting scene.

I didn't think he was that written up as one dimensional at all. His fish out of water scenes in prison and his "duck hunter" scenes with Peoples were welcome and I liked the way in which he really objects to pushing drugs amongst his own crowd, but is forced into it by the events that are played out. I thought Bale was very convincing too.

I think you're readimg too much into it, he's just a spoiled brat that does whatever he wants, and so at that time he just felt like hitting someone and so he did, and if the guy died from it so be it.
There is no need for him to have any major reason.
In the same way that he may not be that racist usually but felt like being it that night (or not, it doesn't matter either way)