Newt defended himself by saying he meant "ghetto" as in a place where people of one ethnicity congregate, not "ghetto" as in, say, a place where there are a lot of poor people and where white people are afraid to go (he didn't say that specifically - I'm just giving his comments a little more color). He even said, to much ridicule, "ghetto, historically had referred as a Jewish reference originally."
Now don't get me wrong - Newt Gingrich is a truly awful character, repellent in just about every way. But I do think here he's getting a bad rap. In fact, "ghetto" does historically refer to Jews. My parents both grew up in Jewish ghettos, right here in Norte America. And even the repository of all human knowledge, i.e. Wikipedia, says so:
A ghetto is an area where people from a specific racial or ethnic background are united in a given culture or religion live as a group, voluntarily or involuntarily, in milder or stricter seclusion. The word historically referred specifically to the Venetian Ghetto in Venice, Italy, where Jews were required to live. It was later applied to neighborhoods in other cities where Jews were required to live.
So let's let Newt off the hook on this one. Don't worry, he'll say plenty of offensive things in the days to come.