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Over a twelve months following the vote that handed Donald Trump a decisive comeback victory, the Democratic party has yet to released its postmortem analysis. But, last week, an prominent liberal advocacy organization published its own. The Harris campaign, its authors contended, failed to connect with core constituencies because it failed to concentrate enough on tackling basic economic anxieties. In focusing on the menace to democracy that Trumpist populism represented, liberals neglected the kitchen-table concerns that were uppermost 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 lesson that must be fully understood in European capitals. The White House, as its recently published national security strategy makes clear, is hopeful that “nationalist movements 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, supported by significant segments of blue-collar voters. But among establishment politicians and parties, it is hard to discern a response that is sufficient to troubling times.

Major Challenges and Costly Solutions

The issues Europe faces are expensive and historic. They encompass the war in Ukraine, maintaining the momentum of the green transition, addressing demographic change and developing economies that are less vulnerable 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 report last year on European economic competitiveness called for substantial 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 stagnated for years.

However, at both the pan-European and national levels, there remains a lack of boldness when it comes to generating funds. The EU’s so-called “budget hawks resist the idea of collective borrowing, and EU spending plans for the next seven years are deeply timid. In France, the idea of a tax on the super-rich is overwhelmingly popular with voters. But the embattled centrist government – while desperate to cut its budget deficit – refuses to contemplate such a move.

The Price of Political Paralysis

The truth 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 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 nativist social policy. Ms Le Pen’s party, for example, has resisted moves to raise the retirement age and has stated that it would target any benefit cuts at foreign residents.

Avoiding a Strategic Advantage for Nationalists

In the US, Mr Trump’s pledges to protect working-class interests were deeply disingenuous, as subsequent Medicaid cuts and fiscal benefits for the wealthy demonstrated. Yet without a compelling progressive counteroffer from the Harris campaign, they worked on the election circuit. Without a fundamental change in fiscal policy, societal agreements across the continent risk being torn apart. Governments must steer clear of giving this electoral boon to the Trumpian forces already on the march in Europe.