C. Rob,
I'm over-limit, but let me restate my opinion another way. I think all prejudice ultimately serves class prejudice, the class system. America basically discriminates and violates on the basis of class and for overt economic reasons. Americans make up the same ethnic fictions anybody else does but we seem far less wedded to them, willing to throw them away, even if we may also be as or more violent on the basis of them. That's a very important distinction because ethnic prejudice can take on a life of its own. The kind of prejudice we see in the Balkans creates an oppressive dynamic beyond the basic issues of class. Because it is so deeply ingrained in the way people think, it becomes a political logic unto itself.
In fact, it is the kind of logic that informs pre-capitalist forms of oppression. Within the capitalist system, class prejudice is expected but ethnic prejudice, especially pervasive and perpetual prejudice, forms yet another layer that has to be removed before we can get people to act civilly. Ethnic prejudice undermines even the protections afforded by the liberal-capitalist state, which are hard enough to establish and maintain (even as those hard-won protections are themselves insufficient - what a mess).
As the modern, "contractual" state has failed much of central Europe, people have retreated to the pre-capitalist organizing method of ethnic self-identification. By all reports Albanians have faced the downfall of their government by self-organizing along family, clan and tribe (or whatever the Albanian word is). Likewise, the Serbs and Croats fell back on ethnicity to define their state. Of course the Czechs and Slovaks did the same thing, but more peacefully and they were able to move quickly to a solid contractual state. So when I say the (former) Yugoslavs and Albanian Kosovars are less civilized, I mean it in the Marxist sense as well I mean to indicate how badly they behave towards one another. They have fallen back to a pre-capitalist mode of organization. That doesn't mean, of course, that they are any worse people than anybody else but they are certainly much worse off. They are sure as hell treating each other badly. Now they will have to re-form the contractual state in an environment that distrusts it in favor of ethnic self-identification. That environment leaves people very vulnerable to political hacks, tyrants and criminals - like drugs gangsters, Milosovic, Bill Clinton and NATO.
As we all well know, keeping people from being brutal in a fully "enlightened" bourgeois-democratic state is very difficult. To overlay on that difficulty such ingrained, virulent prejudice is to make civilization all but impossible. People who would lay brutality on top of brutality have to be called to account and made to stop. I think that means leftists should be willing to call a bigot a bigot even if he is a victim of imperialist Western provocations and violence and/or himself the victim of bigotry.
Finally, not only does it not undermine one's empathy and compassion to call a person a bigot when that is true, one's empathy and compassion are not truly tested until one must have them for a bigot. I may be guilty of some loose talk, both uncompassionate and lacking empathy, for Balkan bigots but no condemnation of them as people can be ascribed to me, however often it maybe projected onto me.
peace