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More than a year following the election that delivered Donald Trump a decisive return victory, the Democratic Party has still not issued its postmortem analysis. However, last week, an influential progressive lobby group published its own. Kamala Harris's campaign, its authors contended, did not resonate with key voter blocs because it failed to concentrate enough on tackling basic economic anxieties. By prioritising the threat to democracy that Trumpist populism represented, liberals overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Warning for Europe

As the EU braces for a turbulent era of politics between now and the end of the decade, that is a message that needs to be fully absorbed in Brussels, Paris and Berlin. The White House, as its recently published national security strategy indicates, is hopeful that “patriotic” parties in Europe will soon replicate Mr Trump’s success. In the EU’s Franco-German engine room, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, supported by large swaths of working-class voters. Yet among mainstream leaders and parties, it is hard to discern a response that is adequate to troubling times.

Era-Defining Problems and Expensive Solutions

The challenges Europe faces are expensive and era-defining. They include the war in Ukraine, sustaining the momentum of the green transition, dealing with demographic change and building economies that are more resilient to pressure by Mr Trump and China. According to a European thinktank, 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 called for massive investment in public goods, to be financed in part by collective EU debt.

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

But, at both the pan-European and national levels, there remains a lack of boldness 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 widely supported with voters. Yet the embattled centrist government – while desperate to cut its budget deficit – will not consider such a move.

The Price of Political Paralysis

The reality is that in the absence of such measures, the less affluent will bear the brunt of fiscal tightening through austerity budgets and increased inequality. Acrimonious recent disputes over retirement reforms in both France and Germany testify to 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 welfare chauvinism. Ms Le Pen’s party, for example, has opposed moves to raise the retirement age and has said that it would target any benefit cuts at foreign residents.

Avoiding a Strategic Advantage for Populists

In the US, Mr Trump’s promises to protect working-class interests were deeply disingenuous, as later Medicaid cuts and fiscal benefits for the wealthy demonstrated. Yet in the absence of a convincing progressive alternative from the Harris campaign, they proved effective on the election circuit. Absent a fundamental change in economic approach, social contracts across the continent risk being ripped up. Governments must steer clear of handing this political gift to the Trumpian forces already on the rise in Europe.