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Over a twelve months following the election that delivered Donald Trump a decisive comeback victory, the Democratic party has still not issued its election autopsy. But, last week, an influential liberal advocacy organization released its own. The Harris campaign, its authors argued, failed to connect with key voter blocs because it did not focus enough on tackling everyday financial worries. In focusing on the threat to democracy that Trumpist populism represented, progressives overlooked the kitchen-table concerns that were uppermost in many people’s minds.

A Warning for European Capitals

While Europe prepares for a turbulent era of politics between now and the end of the decade, that is a lesson that must be fully understood in Brussels, Paris and Berlin. The White House, as its recently published national security strategy makes clear, is hopeful that “patriotic” parties in Europe will soon mirror Mr Trump’s success. Within Europe's Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by significant segments of working-class voters. Yet among establishment politicians and parties, it is difficult to see a response that is adequate to troubling times.

Major Challenges 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 more resilient to bullying by Mr Trump and China. According to a European research institute, the new age of global instability could necessitate an additional €250bn in annual EU defence spending. A significant study last year on European economic competitiveness demanded massive investment in public goods, to be partly funded by jointly held EU debt.

Such a economic transformation would boost growth figures that have stagnated 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 resist the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are profoundly timid. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. Yet 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 in the absence of such measures, the less affluent will pay the price of fiscal tightening through austerity budgets and greater inequality. Bitter recent disputes over retirement reforms in both France and Germany testify to a developing struggle over the future of the European social model – a trend that the RN and the AfD have eagerly leveraged to promote a politics of welfare chauvinism. 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.

Avoiding a Strategic Advantage for Nationalists

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as later Medicaid cuts and tax breaks for the wealthy demonstrated. Yet in the absence of a convincing progressive alternative from the Harris campaign, they proved effective on the campaign trail. Without a fundamental change in fiscal policy, social contracts across the continent risk being torn apart. Governments must steer clear of handing this political gift to the populist movements already on the march in Europe.