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More than a year following the vote that handed Donald Trump a decisive comeback victory, the Democratic party has yet to released its postmortem analysis. But, recently, an influential liberal advocacy organization released its own. Kamala Harris's campaign, its writers argued, did not resonate with core constituencies because it failed to concentrate enough on addressing basic economic anxieties. 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 Lesson for European Capitals

As the EU braces for a tumultuous period of politics between now and the end of the decade, that is a message that needs to be fully absorbed in European capitals. The White House, as its recently published national security strategy indicates, is hopeful 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) top the polls, backed by significant segments of blue-collar voters. But among mainstream leaders and parties, it is difficult to see a strategy that is sufficient to troubling times.

Era-Defining 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, addressing demographic change and building economies that are more resilient to pressure by Mr Trump and China. As per a European thinktank, the new age of geopolitical insecurity could require an additional €250bn in yearly EU defence spending. A significant study last year on European economic competitiveness called for substantial investment in shared infrastructure, to be partly funded by collective EU debt.

Such a economic transformation would stimulate growth figures that have stagnated for years.

However, 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 “frugal” nations resist the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are profoundly unambitious. In France, the idea of a wealth tax is overwhelmingly popular with voters. Yet the embattled centrist government – though desperate to cut its budget deficit – refuses to contemplate such a move.

The Cost of Political Paralysis

The truth is that in the absence of such measures, the less affluent will pay the price of financial adjustment through austerity budgets and increased inequality. Bitter recent disputes over pension cutbacks in both France and Germany highlight a growing battle over the future of the European welfare state – a phenomenon that the RN and the AfD have happily exploited 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 foreign residents.

Avoiding 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 tax breaks for the wealthy underlined. But without a convincing progressive counteroffer from the Harris campaign, they worked on the campaign trail. Absent a radical shift in fiscal policy, social contracts across the continent are in danger of being torn apart. Policymakers must avoid giving this electoral boon to the populist movements already on the march in Europe.