Governments as a whole have a lot of different hammers for monetary policy. It's just that every other one depends on the Congress understanding the problem and cooperating.

Central banks are not governmental organizations.

Technically they are (everybody who works for the Fed or the Bank of England gets a governmenT paycheck) and in a technical sense they aren’t, or try not to be (independent balance sheets).

But they are involved in policy decisions, being consulted and themselves asking. They do t have an independent mission the way, say, a trucking company does.

Just because they're not elected doesn't mean theyre not part of the government.

It sounds pedantic, but it very much depends on how you define 'government'.

it's just as much government as the supreme court. senate confirmed presidential appointees. they have a dual mandate (price stability and low unemployment)

The Federal Reserve banks are.

No they are not, though it's easy to understand the confusion. From the SF Feds website:

    The Board of Governors—Located in Washington, D.C., Board members are appointed by the U.S. President and confirmed by the U.S. Senate. Board members and staff are civil service employees.
    The 12 regional Reserve Banks—Located around the country, the 12 Federal Reserve Banks are chartered as private corporations. Employees are not civil service.
    The Federal Open Market Committee (FOMC)—Composed of the Federal Reserve Governors and the Federal Reserve Bank presidents, the FOMC is charged with conducting monetary policy.

Yes, I'm aware of the legal fiction that they are not part of the government. But they are, as they are run by people appointed by the government, and therefore serve the government.

I rather think the fiction is that they serve the government, but I also have The Creature from Jekyll Island in the backseat for light reading so my perspective probably is heavily biased.

You aren't biased at all [1]. Our dear colleagues (along with the majority of the American populace) are just deeply ideologically committed to the idea of the Federal Reserve being a public institution, because they've been told this implicitly all their lives.

The truth, which is difficult to uncover and requires digging into some legislation, is of course unsettling, because it points to the nature of the American system and which institutions have power. Hint: if an institution is immune to bankruptcy or prosecution, it's probably the one in charge.

1. https://publicbankinginstitute.org/money-banking-basics/

They are not part of the government. They are more senior than that, they are part of the elite.

Right. It’s really up to businesses and governments. Businesses to make productive investments and governments to make the appropriate counter-cyclical investments (beyond just interest rates) to keep the productive investments more attractive than the non-productive speculative ones for businesses.

QE as well.

I just don't see why they can't put conditions on some of their lending to focus the intent of the money.

Simple: It is not the responsibility of the Fed to evaluate and empower or degrade certain markets according to what "smart investments" should be. This is ultimately up to the banks that receive the money and the people who come up with investment ideas.

This entire conversation is about how those entities don't seem to be doing a particularly good job.

And that is a very valid concern, but the Fed is not the one to address that problem.

Yes, but governments have other hammers, called tax rates, and deficit spending.