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Over a year following the vote that handed Donald Trump a clear-cut comeback victory, the Democratic party has still not released its election autopsy. However, last week, an influential progressive lobby group published its own. Kamala Harris's campaign, its writers argued, did not resonate with key voter blocs because it did not focus enough on addressing everyday financial worries. By prioritising the menace to democracy that Maga authoritarianism represented, liberals neglected the bread-and-butter issues that were foremost in many people’s minds.

A Lesson for European Capitals

As the EU braces for a turbulent era of politics from now until the end of the decade, that is a lesson that must be fully understood in European capitals. The White House, as its recently published national security strategy makes clear, is hopeful that “nationalist movements in Europe will quickly mirror Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by large swaths of blue-collar voters. Yet among establishment politicians and parties, it is difficult to see a response that is adequate to challenging times.

Era-Defining Problems and Costly Solutions

The challenges Europe faces are expensive and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, addressing demographic change and building economies that are less vulnerable to bullying by Mr Trump and China. According to a European thinktank, the new age of global instability could necessitate an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness called for substantial investment in shared infrastructure, to be partly funded by collective 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 remains a lack of boldness 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 deeply unambitious. In France, the idea of a wealth tax is widely supported with voters. But the embattled centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Cost of Political Paralysis

The truth is that in the absence of such measures, the less well-off will bear the brunt of financial adjustment through austerity budgets and greater inequality. Acrimonious recent conflicts 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 welfare chauvinism. Ms Le Pen’s party, for example, has opposed 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 Populists

In the US, Mr Trump’s pledges to protect working-class interests were largely insincere, as subsequent Medicaid cuts and tax breaks for the wealthy demonstrated. Yet without a convincing progressive alternative from the Harris campaign, they worked on the campaign trail. Absent a radical shift in economic approach, social contracts across the continent are in danger of being torn apart. Policymakers must avoid handing this political gift to the populist movements already on the march in Europe.