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Over a twelve months following the vote that delivered Donald Trump a decisive return victory, the Democratic party has yet to issued its postmortem analysis. However, last week, an influential progressive lobby group published its own. The Harris campaign, its authors contended, did not resonate with key voter blocs because it did not focus enough on addressing everyday financial worries. In focusing on the menace to democracy that Trumpist populism represented, liberals overlooked the kitchen-table concerns that were foremost in many people’s minds.

A Lesson for European Capitals

While Europe prepares for a tumultuous period of politics from now until the end of the decade, that is a lesson that needs to be fully understood in Brussels, Paris and Berlin. The White House, as its newly released national security strategy indicates, is hopeful that “nationalist movements in Europe will soon replicate Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by large swaths of working-class voters. But among mainstream leaders and parties, it is difficult to see a strategy that is adequate to troubling times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are expensive and historic. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and building economies that are more resilient to bullying by Mr Trump and China. According to a European research institute, the new age of geopolitical insecurity could require an additional €250bn in annual EU defence spending. A significant study last year on European economic competitiveness demanded substantial investment in public goods, to be partly funded by jointly held EU debt.

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

However, at both the EU-wide and national levels, there continues to be a lack of boldness when it comes to revenue raising. The EU’s so-called “budget hawks resist the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are deeply timid. In France, the idea of a wealth tax is overwhelmingly popular with voters. But the embattled centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Political Paralysis

The reality is that without such measures, the less affluent will pay the price of fiscal tightening through spending cuts and increased inequality. Acrimonious recent disputes over retirement reforms in both France and Germany testify to a growing battle over the future of the European social model – a phenomenon that the RN and the AfD have eagerly leveraged to promote a politics of nativist social policy. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has stated that it would target any benefit cuts at non-French nationals.

Avoiding a Political Gift for Populists

Across the Atlantic, Mr Trump’s pledges to protect blue‑collar interests were deeply disingenuous, as later Medicaid cuts and tax breaks for the wealthy demonstrated. But without a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Without a fundamental change in fiscal policy, social contracts across the continent are in danger of being torn apart. Policymakers must steer clear of handing this political gift to the Trumpian forces already on the rise in Europe.