Actually Kenneth Althaus IS NOT portrayed in the game (Hearts of Iron) as a Nazi (specifically a german national socialist associated with Hitler's regime), but as an American National Socialist. National socialism has many forms, including the Jewish Zionist and Arab Baathist movements. It is a "right-wing" authoritarian form of government that places the nation above the individual and is associated with a planned economy controlled by the government instead of a free market. Every country in the world has some degree of socialism in their economy. While IMHO national socialism is not a good type of government, the actions of the Nazis in WWII and subsequent propaganda have given national socialism a much worse "rap" than is actually the case. The Nazi activities that we are forbidden to talk about on this website have nothing to do with national socialism as a form of government, although this type of government can facilitate such activities.
National socialists tend to be very patriotic, military-oriented, believe the good of the many outweighs the good of the few, see things in black and white, and believe that the ends justify the means. National socialists can either be atheists (the state is god) or very religious (the state is blessed by god or is doing god's will and is thus always right). This is a valid philosophy, although not mine.
Kenneth Althaus was apparently not a member of the American National Socialist Party so the game misrepresents his political affiliation. This is unfortunate for his relatives and a general problem with historically based games where fact and fiction intermingle. However, since the game utilizes thousands of historical figures and allows alternative outcomes (e.g., a national socialist US), Paradox Interactive has tried to match these figures with leadership and minister positions associated with the various ideological orientations of the game.
In the absence of viable American national socialist alternatives, PI probably chose historical figures such as Kenneth Althaus that they considered very patriotic with a strong military orientation instead (no military is a democracy). Interesting that Althaus and Patton were good friends. If Patton was the leader of the US in 1945 and allowed to choose his form of government, I wonder what type it would have been. Certainly not stalinist or left wing, possibly not democratic. I would guess Paternal Autocrat, if not farther to the right.
Great to see a close relative's opinion and hope he is not offended by this.