Why is Dr. Heine upset by the elderly doctor's puppet show in the novel, The White Horses of Vienna?

Everyone in attendance seems to be enjoying the puppet show immensely. When Dr. Heine, however, starts to realize that the grasshopper is called "The Leader" and the clown "Chancellor" for no apparent reason, he laughs less and less. The Leader and the Chancellor continue to talk about religion, but the Leader always wins their arguments. To the roars of the children's laughter, the clown says "I believe in independence" and then promptly falls over his sword. The Leader says that the clown is relying on the help of the heavens, but implies they may not be strong enough to support him.