The term is “white n#$@r.” Costello used it because that is what they called his grandfather during his military days in World War II.
This is something that drives me crazy. The “white n#$@r” is obviously derogatory and arguably more insulting than the original “n” word, but in this case it was almost a term of endearment.
When I was a kid, the “n” word was almost completely innocuous. People were labeled by their tribe to a large extent, sometimes by country of origin (“mick”, “spic”, “jew”) with no insult intended, other times just by their family name (“your one of those Woosley’s right?”). When people used those labels in anger, they were insults. Nowadays, the “n” word among black people is indeed a term of endearment, but a horrible insult from anyone outside of that community.
Did you know that in Latin America, they call white foreigner’s “gringo”? And it is not derogatory in the least to them. But if they call you “f*&king gringo” then it is time to run!
I believe that Costello’s approach is wrong. It would serve the world much better if he played the song and continued to explain the meaning and origin. We forget our past so easily and the hatred associated with the word now, really doesn’t reflect the values where it has been used historically. My two cents