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Over a twelve months after the vote that handed Donald Trump a decisive return victory, the Democratic party has still not released its postmortem analysis. But, recently, an prominent liberal advocacy organization published its own. Kamala Harris's campaign, its authors argued, did not resonate with key voter blocs because it failed to concentrate enough on addressing basic economic anxieties. By prioritising the menace to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were uppermost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a tumultuous period of politics from now until the end of the decade, that is a message that needs to be fully absorbed in Brussels, Paris and Berlin. The White House, as its newly released national security strategy indicates, is hopeful that “patriotic” parties in Europe will quickly mirror Mr Trump’s success. In the EU’s core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by large swaths of blue-collar voters. But among establishment politicians and parties, it is difficult to see a strategy that is adequate to troubling times.

Major Challenges and Expensive Solutions

The issues Europe faces are expensive and era-defining. They include the war in Ukraine, maintaining the momentum of the green transition, dealing with demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. As per a European research institute, the new age of geopolitical insecurity could necessitate an additional €250bn in annual EU defence spending. A major report last year on European economic competitiveness demanded substantial investment in public goods, to be partly funded by jointly held EU debt.

Such a economic transformation would boost growth figures that have flatlined for years.

But, at both the pan-European and national levels, there continues to be a deficit of courage when it comes to revenue raising. The EU’s so-called “budget hawks oppose the idea of shared debt, and Brussels’ budget proposals for the next seven years are deeply unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. But the embattled centrist government – though desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Inaction

The reality is that in the absence of such measures, the less affluent will bear the brunt of fiscal tightening through austerity budgets and greater inequality. Bitter recent conflicts over retirement reforms in both France and Germany testify to a developing struggle over the future of the European welfare state – a phenomenon that the RN and the AfD have happily exploited to promote a politics of nativist social policy. Ms Le Pen’s party, for example, has resisted moves to raise the retirement age and has said that it would target any benefit cuts at non-French nationals.

Preventing a Political Gift for Nationalists

In the US, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as subsequent Medicaid cuts and fiscal benefits for the wealthy demonstrated. Yet in the absence of a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Absent a fundamental change in fiscal policy, social contracts across the continent risk being torn apart. Governments must steer clear of giving this political gift to the populist movements already on the rise in Europe.