Here's something I disagree with, which is Meltzer's last paragraph:
The Fed should rethink its strategy. It should ask what is the best, conditional, multi-year strategy to eliminate the massive overhang of idle reserves. I am sure the answer will not be to watch the noisy, frequently-revised labor market data on unemployment. It is long past time to announce a strategy that puts the Fed on a path that reduces the idle reserves at lowest social cost and gradually restores a pre-announced rule based monetary policy. The way to start that journey is to end QE.It gives entirely the wrong message to call the existing stock of reserves a "massive overhang," or "idle." In the same sense, there is a massive overhang of Treasury bills in the economy. That wouldn't be correct either.