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More than a twelve months following the vote that delivered Donald Trump a decisive comeback victory, the Democratic party has still not issued its election autopsy. However, last week, an prominent progressive lobby group released its own. Kamala Harris's campaign, its writers argued, failed to connect with key voter blocs because it failed to concentrate enough on tackling everyday financial worries. In focusing on the menace to democracy that Trumpist populism represented, progressives overlooked the bread-and-butter issues that were foremost in many people’s minds.

A Warning for European Capitals

As the EU braces for a turbulent era of politics between now and the end of the decade, that is a message that must be fully absorbed in Brussels, Paris and Berlin. The White House, as its recently published national security strategy makes clear, is hopeful that “nationalist movements in Europe will soon mirror Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) lead the polls, backed by large swaths of blue-collar voters. Yet among mainstream leaders and parties, it is hard to discern a strategy that is adequate to challenging times.

Major Problems and Costly Solutions

The issues Europe faces are expensive and era-defining. They include 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. According to a European research institute, the new age of global instability could require an additional €250bn in yearly EU defence spending. A major report last year on European economic competitiveness demanded massive investment in shared infrastructure, to be financed in part by collective EU debt.

Such a fiscal paradigm shift would boost growth figures that have flatlined 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 “frugal” nations oppose the idea of shared debt, 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. Yet the beleaguered centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Inaction

The truth is that in the absence of such measures, the less well-off will bear the brunt of fiscal tightening through spending cuts and greater inequality. Acrimonious recent conflicts over retirement reforms in both France and Germany highlight a developing struggle over the future of the European welfare state – 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 said that it would target any benefit cuts at foreign residents.

Preventing a Strategic Advantage 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 in the absence of a compelling progressive alternative from the Harris campaign, they worked on the election circuit. Absent a fundamental change in fiscal policy, social contracts across the continent risk being ripped up. Governments must steer clear of handing this electoral boon to the Trumpian forces already on the march in Europe.