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What do you call it when some group of people is feeling self-satisfaction in praising themselves, even though others don't think them praise-worthy?

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Mutual admiration society is apparently an expression in English, used at least as early as 1824.

A group of two or more people, in a workplace or other social environment, who routinely express considerable esteem and support for one another, sometimes to the point of exaggeration or pretense.

I was about to comment about the Swedish expression "klubben för inbördes beundran" that translates to pretty much the same thing, and found the English version while researching it.

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The term was certainly popularised, and probably coined, by Oliver Wendell Holmes in the mid 1800s, in reference to the "literary set" of Boston, where he himself was based. It seems he actually quite liked being in that society, and enjoyed giving and receiving praise among peers. – FumbleFingers Mar 11 '12 at 23:18
One might take one of @Jim's suggestions and place it in front of this one if you want to strongly make the point that the Mutual Admiration does not necessarily extend beyond their society. – TecBrat Jun 3 '12 at 11:32

The potentially offensive phrase "circle jerk" literally means group masturbation, but is used metaphorically to describe this situation.

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I propose that self-congratulatory or self-important best capture a person who is complacent and self-praising. Words like smug or preening are more about the manner in which someone expresses conceit.

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You could try, smug, pompous, conceited or vain.

smug : highly self-satisfied

pompous: having or exhibiting self-importance

conceited: : having or showing an excessively high opinion of oneself

vain: having or showing undue or excessive pride in one's appearance or achievements

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Besides smugness, consider crowing, preening, and bragging. Brag means "to boast; to talk with excessive pride about what one has, can do, or has done."

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+1 for the choice of boast – nico Mar 11 '12 at 8:34

You could always say that they were / are gloating.

Definition of 'gloating':

to observe or think about something with triumphant and often malicious satisfaction, gratification, or delight

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