There's an interesting debate raging on Twitter, triggered by Nassim Taleb, about the racism in Borat. It seems pretty undeniable that Borat is deeply racist, and some of the techniques used in the movie to fool people into playing the butt of the joke is downright bullying. (See Zeynep Tufekci's thread here)
But, Borat also targets the approved-for-mocking segments of western society, so the people who are typically up in arms about endemic racism are not only silent but are cheering for it. It turns out, shitting on an ethnicity you can barely pronounce is a small price for catching Rudy Giuliani with his hand in his pants.
This is a good measure of knowing where true power lies in society. If you think democracy is in danger because of right wing nuts or white supremacists, ask yourself who is more likely to pay a price for comedy: a comedian who mocks poor, low-education, white westerners and politicians who pander to them, or one that would similarly mocks, say, blacks or hispanics? Similarly, what kind of stereotyping would we accept as "just parody" and which ones would prompt widespread condemnation in newspapers of record?
I, for one, think Borat is racist, and that it's OK. The answer to offensive speech is always more speech, not censoring it or calling for its cancellation or trying to outlaw it with piddling "hate speech" laws. Some speech will always cause someone's feelings from being hurt. It's fine. They'll get over it.