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"You Nazty Spy! is significant because it satirized the Nazis and the Third Reich and helped publicize the Nazi threat in a period when America was still neutral about World War II, and isolationist sentiment was prevalent among the public. During this period, isolationist senators such as Burton Wheeler and Gerald Nye objected to Hollywood films on grounds that they were anti-Nazi propaganda vehicles designed to mobilize the American public for war. According to the Internet Movie Database, You Nazty Spy! was the first Hollywood film to spoof Hitler. It was released nine months before the more famous Charlie Chaplin film The Great Dictator. Heavy publicity in Hollywood about Chaplin's planned film began to circulate in mid-1939, and may have helped serve as inspiration for the film. Much like the case of Chaplin, Moe Howard's physical resemblance to Hitler (when in makeup) was probably a key source of inspiration.The Hays code discouraged or prohibited many types of political and satirical messages in films, requiring that the history and prominent people of other countries must be portrayed "fairly"; but short subjects may have been subject to less attention than feature films.
Another notable feature of You Nazty Spy! was the fact that it was implying business interests were behind the Nazi rise to power. This is probably reflective of a common belief amongst some Americans about the Nazis at the time."