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Over a twelve months after the election that handed Donald Trump a clear-cut return victory, the Democratic Party has yet to issued its postmortem analysis. But, last week, an influential liberal advocacy organization published its own. The Harris campaign, its authors argued, did not resonate with core constituencies because it failed to concentrate enough on addressing everyday financial worries. In focusing on the threat to democracy that Trumpist populism represented, liberals neglected the kitchen-table concerns that were foremost in many people’s minds.

A Warning for European Capitals

As the EU braces for a turbulent era of politics between now and the end of the decade, that is a lesson that must be fully absorbed in European capitals. The White House, as its newly released national security strategy indicates, is optimistic that “nationalist movements in Europe will quickly replicate 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, supported by large swaths of blue-collar voters. But among mainstream leaders and parties, it is difficult to see a response that is sufficient to troubling times.

Major Challenges and Costly Solutions

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

Such a fiscal paradigm shift would stimulate growth figures that have flatlined for years.

But, at both the pan-European and national levels, there remains a deficit of courage when it comes to revenue raising. The EU’s so-called “budget hawks oppose the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are profoundly timid. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Price of Inaction

The truth is that without such measures, the less affluent will bear the brunt of fiscal tightening through spending cuts and greater inequality. Acrimonious recent conflicts over retirement reforms in both France and Germany highlight 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 focus any benefit cuts at non-French nationals.

Preventing a Political Gift for Nationalists

In the US, Mr Trump’s pledges to protect blue‑collar interests were largely insincere, as later Medicaid cuts and fiscal benefits for the wealthy underlined. But in the absence of a convincing progressive counteroffer from the Harris campaign, they proved effective on the election circuit. Without a fundamental change in economic approach, social contracts across the continent risk being torn apart. Policymakers must avoid giving this political gift to the populist movements already on the rise in Europe.