How we cite our quotes: All quotations are from Life Is Beautiful.
Quote #1
ORESTE: Goodbye, and behave yourselves because these are hard times. Hard, hard times!
GUIDO: They're hard times? Why, what are your political views?
ORESTE: Benito! Adolf! Be good! What did you say?
GUIDO [hesitates]: I said, how are things going?
The war is a bit of a relief pitcher in this film. During the first half of the movie, it mostly hangs out in the pen, throwing warmup pitches and waiting for its time to jump into the game. Still, we get a few glimpses of what's to come.
Here, we learn that Oreste named his sons Benito and Adolf (read: Benito Mussolini and Adolf Hitler). Oreste seems like a perfectly nice guy; he even goofs with Guido over his hat. So this is a pretty ominous sign that even normal people are becoming Nazi sympathizers.
Quote #2
GUIDO [laughing]: Naturally! Our race is superior. I've just come from Rome, right this minute to come and tell you in order that you'll know, children, that our race is a superior one. I was chosen, I was, by racist Italian scientists in order to demonstrate how superior our race is. Why did they pick me, children? [Jumps up onto the table.] Must I tell you? Where can you find someone more handsome than me? Justly so, there is silence. I'm an original "superior race," pure Aryan.
Another hint of things to come. Before Guido showed up to mac on Dora, these children were going to receive a state-sanctioned lesson on their racial superiority. Yeah, that was an actual thing in 1930s Europe.
See, Mussolini and Hitler convinced their respective countries that their race was superior and that others—notably Jews, Blacks, and Slavs—were inferior. "Untermenschen"—subhumans—was the word they used. Of course, convincing your citizens that they are racially, therefore also morally, superior is an effective way to psych them up for war.
Guido's hilarious lecture is a send-up of that wrong-headed idea. If you want to read more on the Nazi ideology of race, the U.S. Holocaust Memorial Museum has a lesson on that.
Quote #3
MAESTRO: And now, ladies and gentlemen, a magnificent surprise offered by the Grand Hotel. The Ethiopian cake!
This not-so-subtle cake is a subtle reminder that Italy's already at war. The Italo-Ethiopian War saw Italy invade Ethiopia and take occupation of the country under Italian rule (Source).
That war was one of the lead-ups to World War II and came at the height of fascism's popularity in Europe. Essentially, the Italians wanted to have conquest cakes that belonged to other people and eat it too.