What about the idea of racism? It's bad, right? We'll take the racism of Whites against Blacks as an example. Racists are prejudiced against other people simply due to the color of their skin. That's unfair and wrong. Skin color has to do with how much melanin is in one's skin; the level of melanin in a person's skin is no basis for a judgment of their person or a reason to look with disfavor or hate on them.
Should the government criminalize racism? It depends. The government should criminalize racism of the type that leads to groups of White citizens hanging Blacks. However, there are other types of racism that do not meet the harm requirement. Some people see Blacks with disfavor because they are Black. This will affect their choices in employment, housing, and other areas. As citizens conducting their private lives with their own property, however, not giving someone something does not meet the harm principle. People are not (should not be) obligated to rent to, employ, or otherwise deal with anyone (excepting binding contracts and the like). People should be free to dislike, hate, ect. other people, as long as their views do not advocate inflicting harm on them.
So, am I saying the government should not take a stance on racism? No, absolutely not. Remember equality before the law. Government should be against all racism in all its actions, not favoring or penalizing based on skin color. However, the government should not criminalize its citizens racism and racist actions--as long as they do not inflict harm on others or have something that strongly encourages the inflicting of harm on others.