Where does identity come from?

In a class discussion the concept of identity and where it is created or derived from.  A few questions that really intrigued me came up:

1 Where does the universal "we" or " them" come from ?

2 Who does this refer to?

3 Why do we use terms like "arab american" or "spanish american" and not just american?

When discussing particular topics many people including myself use terms like we or them when discussing different cultures or peoples.  Politicians often use terms like we and them when giving speeches but I am not so sure these terms are clear as to who the "we" are or who the "them" are.  To take it a step further most times it is unclear as to how people chose to define themselves when making a declaring statement using "I".  What gives us our identity, is it physical features, ethnic backgrounds, location, and what words do you we often use to define ourselves.  From taking a history course during the industrial revolution as immigration to the US grew enormously many people tried to leave there ethnic origins behind in order to blend in with Americans.  An Irish immigrant would not want to call themselves an Irish American due to discriminatory and prejudice factors that society placed on them. Somewhere along the way Americans began to search for identity in the cultural landscape and more terms like Arab American, Latin American, or Native American.  

The argument that in the US today it is not or ethnic origins that define who we are but in fact commercial products that shape our identities.  The car you drive, the clothes you wear, the music you listen to, all the products you purchase define who you are.  I recall a scene in the movie Fight Club where the main character  played by Edward Norton has his apartment blown up and he is distraught claiming every piece of furniture represented him and now that it was gone he was unsure as to who he was.