[1] In 1930, Dietrich succeeded Paul Moldenhauer as Finance Minister of the Weimar Republic.

[2][3] In the midst of the Great Depression, Dietrich became the "chief proponent" of government contracts in 1930[4] in an attempt to offset the drastic increase in unemployment.

[5] Dietrich, along with the economists Heinrich Brüning and Adam Stegerwald, firmly believed that accelerating the pace of the agricultural sector at the cost of Germany's industrial capacity would solve unemployment.

[5] He was initially opposed to the deflationary policy pushed by Brüning, but later changed his position and said it was a "necessary measure" along with the cut in civil workers' salaries.

[6][7] During President Paul von Hindenburg's bid for re-election, Dietrich was one of few elites in the cabinet barred from speaking at the president's candidacy campaigns for allegedly being "too far left".