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.
Pronunciation
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1998 July 23, T..., “Re: GREEN RIVER NARROWS, NC: ALL PUTINS CLOSED!!”, in rec.boats.paddle[1] (Usenet), retrieved 2018-10-04, message-ID <6p7j7t$r21$1@nnrp1.dejanews.com>:
the same connotations as "FUCKWITS." for less extreme cases i suggest ASSHATS
1999 July 23, madge, “California Hustle,”, in alt.fan.erik[2] (Usenet), retrieved 2018-10-04, message-ID <m-2307991051020001@ppp204184.asahi-net.or.jp>:
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[3], Citadel Press, →ISBN, page 188,
Anyone who would make a claim like this on national TV is a real asshat.