Please look over my example of an "iron triangle" and help me understand the parts I don't get.
I don't really understand iron triangles very well, so I came up with examples for the 'points' of the triangle to help with any explainations one of you fine, intelligent people might offer. What I don't really understand is how the iron triangle helps to make them work with each other.
Say a senator introduces a bill to strengthen homeland security by establishing a division to strengthen cyber security. This bill would be referred to the House Oversight and Government Reform who would then refer it to the Subcommittee on Technology, Information Policy, Intergovernmental Relations and Procurement Reform. That's the Congressional Committee point. For the interest group point, say there's an interest group that hopes to improve cyber and homeland security. Lastly, for the bureaucratic agency point, InfraGuard, the FBI, the Office of Cyber Security & Communications, and the National Cyber Security and Communications Integration Center would be involved.
As you say, what you're missing out on here is how the three parts of the triangle work together. Each part has a stake in helping the other part out. Let's look at your example.
The bill that is being proposed would require the government to buy lots of new computer technology, right? So the interest groups want that because the computer technology and probably some expertise (like for programming and such) will be bought from them. At the same time, the bureaucratic agencies like it because they will be the ones getting their budgets increased to buy the technology and they will be the ones who get more "turf." Finally, the committee members can benefit because the interest group will give campaign donations to them and will perhaps run ads for them and endorse them. So everyone has some stake in the bill. Everyone gets something and they all have an incentive to work together. This can become a problem because, as in this case, no one has an incentive to try to save money or reduce government waste.
An iron triangle is made up of an agency, interest group, and committee which all support the same thing. Like the Veterans Affair committee and agency and interest groups.
The specific examples for an iron triangle for small business shown in the graphic are: small business administration, American Business Association, and Small Business Committee.
Some people consider iron triangles a threat to democracy because they set up a small system in which everyone get what they want and what they need from each group of the triangle, leaving out other groups without participation, for the reason that they are not in the triangle.