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The metaphor "the closet" refers to a part of the subconscious and/or unconscious mind where people 'store' long term memories, unwanted thoughts, unresolved conflicts, etc. I.E. The boogieman coming out of the closet could be interpreted as being a child's attempt to confront an unresolved emotional conflict, such as the fear of the dark. Typically, it is used in reference to something about a person's identity which s/he wishes to keep repressed.
The expression "being in the closet" has been used to describe keeping secret one's sexual behavior or orientation, most commonly homosexuality or bisexuality, but also including the gender identity of transgender and transsexual people. Being "in the closet" is more than being discreet or private, it is a "life-shaping pattern of concealment" where gay, lesbian, bisexual, or transgender individuals hide their sexuality/gender-identity in the most important areas of life, with family, friends, and at work. Individuals may marry or avoid certain jobs in order to avoid suspicion and exposure. Some will even claim to be heterosexual when asked directly. "It is the power of the closet to shape the core of an individual's life that has made homosexuality into a significant personal, social, and political drama in twentieth-century America". (Seidman 2003, p.25).
"Heterosexual domination may have a long history, but the closet does not" with the closet dating from 1950s post-war America, when the deliberateness and aggressiveness of heterosexual enforcement increased. "Gay people in the prewar years [pre-WWI]...did not speak of coming out of what we call the gay closet but rather of coming out into what they called homosexual society or the gay world, a world neither so small, nor so isolated, nor... so hidden as closet implies" (Chauncey 1994, emphasis added). In fact, "using the term 'closet' to refer to" previous times such as "the 1920s and 1930s might be anachronistic" (Kennedy 1996). (ibid, p.25 and 214)
In 1993, Michelangelo Signorile wrote Queer In America (re-released in 2003 by University of Wisconsin Press, ISBN 0-299-19374-8) in which he explored in depth the harm caused both to the "closeted" individual and to society in general by being in the closet. Signorile promoted the practice of outing: publicizing, intentionally or unintentionally, the sexual orientation or gender identity of another person who would prefer to keep this information secret. Often "outing" is used solely to damage the outed person's reputation, and has thus been controversial. Some activists argue "outing" is appropriate and legitimate in some cases—for instance, if the individual is actively working against gay rights. Closeted individuals are also at high risks for suicide [1].