Yet Another "Operation Twist"?

Frank Shostak on the FED's plans to expand its "Operation Twist" program:

A fall in interest rates cannot grow the economy. All that it can produce is a misallocation of real savings. As a rule, an artificial lowering of interest rates (which is accompanied by the central bank's monetary pumping — increasing commercial banks' reserves) boosts the demand for lending; and this, as a rule, causes banks to expand credit "out of thin air."

This in turn sets in motion the diversion of real savings, or real funding, from wealth-generating activities to non-wealth-generating activities.

and more common sense:

In a market economy, interest rates instruct entrepreneurs (in accordance with consumer time preferences) where to channel their capital. A policy that artificially lowers interest rates only sends misleading signals to businesses, thereby resulting in the misallocation of real funding.

and his conclusion:

The US central bank announced that it will expand its "Operation Twist" program by extending the maturities of assets on its balance sheet. So far, this policy seems to have been ineffective in significantly reviving the economy. We suggest that this policy in fact only further distorts the economy. We therefore suggest that the latest extension of "Operation Twist" is going to make things much worse. Because of still-subdued bank lending, it is questionable whether the Fed can artificially stimulate the economy without the cooperation of commercial banks. We are doubtful that banks will agree to cooperate if the pool of real savings is in trouble.