From the slang expression have one's head up one's ass, thus, wearing the ass as a hat. The term is extended to people who are clueless or bumbling, who don't understand what is going on.
asshat (plural asshats)
- (Canada, US, derogatory, slang, vulgar) An obnoxiously ignorant person; a fool.
1998 July 23, T..., “Re: GREEN RIVER NARROWS, NC: ALL PUTINS CLOSED!!”, in rec.boats.paddle, Usenet, retrieved 2018-10-04, message-ID <firstname.lastname@example.org>:
the same connotations as "FUCKWITS." for less extreme cases i suggest ASSHATS
1999 July 23, madge, “California Hustle,”, in alt.fan.erik, Usenet, retrieved 2018-10-04, message-ID <email@example.com>:
1977 CHiPs 3 3/4" action figures (5 different: Ponch, Jon, Sarge,Jimmy Squeaks, Stupid Fucking Asshat Erik Mouse, and Wheels Willie) $10-15 each
- 2007, John Hargrave, Prank the Monkey: The Zug Book of Pranks, Citadel Press, →ISBN, page 188,
- Anyone who would make a claim like this on national TV is a real asshat.