Lilla's not entirely wrong but there are some gaping holes in his argument. The question isn't either/or - you can be socially progressive (which is a winning issue despite his warnings) with economic progressivism/populism (also a winning issue), the Democrats have simple failed over the past twenty years to effectively own that populist sphere.
To start:
If you are going to mention groups in America, you had better mention all of them. If you don’t, those left out will notice and feel excluded. Which, as the data show, was exactly what happened with the white working class and those with strong religious convictions. Fully two-thirds of white voters without college degrees voted for Donald Trump, as did over 80 percent of white evangelicals.
You know how a Democratic candidate wins back white evangelicals? Being an arch-social conservative. This is stupid to even bring up, they are as lost to Democrats as black voters are to Republicans.
What you could also say here is that Trump ran on white identity politics, Hillary ran on everyone else's and his were more effective this time... kind of. Pretending that Democrats normally win a majority of the white working class but this time got crushed doesn't reflect reality. Republicans win the white working class, as they have for forty years.
But the fixation on diversity in our schools and in the press has produced a generation of liberals and progressives narcissistically unaware of conditions outside their self-defined groups, and indifferent to the task of reaching out to Americans in every walk of life.
It would be impossible for this sentence to climb farther up its own ass.
Liberals and progressives are more aware of conditions outside their groups - they have to be, they live in heterogeneous cities and their daily interactions are inherently diverse. It's this vaunted white <whatever> that lives in a bubble - small towns and suburbs where they see people of the same religion, ethnicity and sexual orientation day in and day out.