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More than a twelve months following the vote that delivered 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 released its own. Kamala Harris's campaign, its authors contended, did not resonate with core constituencies because it did not focus enough on addressing everyday financial worries. By prioritising the menace to democracy that Trumpist populism represented, liberals neglected the bread-and-butter issues that were foremost in many people’s minds.

A Warning for Europe

While Europe prepares for a tumultuous period of politics from now until the end of the decade, that is a lesson that needs to be fully absorbed in Brussels, Paris and Berlin. The White House, as its newly released national security strategy indicates, is hopeful that “patriotic” parties in Europe will quickly mirror Mr Trump’s success. Within Europe's core nations, Marine Le Pen’s National Rally (RN) and Alternative für Deutschland (AfD) top the polls, backed by large swaths of working-class voters. Yet among mainstream leaders and parties, it is hard to discern a strategy that is sufficient to challenging times.

Era-Defining Challenges and Expensive Solutions

The challenges Europe faces are expensive and era-defining. They encompass 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. As per a European research institute, the new age of global instability could require an additional €250bn in annual EU defence spending. A major study last year on European economic competitiveness called for massive investment in public goods, to be financed in part by jointly held EU debt.

Such a fiscal paradigm shift would boost growth figures that have flatlined 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 oppose the idea of collective borrowing, and Brussels’ budget proposals for the next seven years are profoundly timid. In France, the idea of a wealth tax is widely supported with voters. Yet the embattled centrist government – though desperate to cut its budget deficit – will not consider such a move.

The Price of Inaction

The truth is that without such measures, the less affluent will bear the brunt of fiscal tightening through spending cuts and greater inequality. Bitter recent disputes over retirement reforms in both France and Germany highlight a growing battle over the future of the European social model – a phenomenon that the RN and the AfD have happily exploited 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

Across the Atlantic, Mr Trump’s promises to protect working-class interests were largely insincere, as subsequent Medicaid cuts and tax breaks for the wealthy underlined. But in the absence of a convincing progressive counteroffer from the Harris campaign, they proved effective on the campaign trail. Without a fundamental change in economic approach, social contracts across the continent are in danger of being ripped up. Policymakers must steer clear of giving this electoral boon to the populist movements already on the march in Europe.