Has the Recovery Been "Unstimulated"?

In James Hamilton's reply to the Scott Sumner article linked below, Hamilton raises a separate issue in pointing out that in October 2008, "the Fed began paying interest on reserves, in effect borrowing directly from banks, and creating an incentive for banks to hold the newly created deposits as a staggering burgeoning of excess reserves . . . preventing its actions from increasing the value of M1." Hamilton is suggesting that the monetary stimulus could not have worked, since the huge wave of liquidity created by the Fed was sequestered inside the banks.

In conjunction with the John Taylor article posted below, which argues that the fiscal stimulus did not work, the implication of Hamilton's point would seem to be that the current economic recovery has occurred as a "natural" process, unstimulated either by fiscal or monetary policy.