I don't think the float was particularly effective or brilliant by any means. It's also not a positive thing to be politicizing summertime community events.
Having said that, what specifically is racist about impersonating a politician who wears a turban and has a beard? It's not like the guy was in blackface and he doesn't appear to be doing anything to belittle or mock Sikh culture (if this is not the case then I'll stand corrected).
I wore an orange turban and kurta to visit the Golden Temple and I'm not Sikh. Am I a racist?
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