I sometimes wonder if my boss is competant at what he does. He often calls other people retarded and stupid yet all too often doesn't know what he is doing or how to do anything better than the people he is calling retarded. He oftens comes off as an egomaniacal know-it-all that is a hard worker but all too often not the most effective worker. To put it simply he acts like the little fat kid who likes to bully others and doesn't like others to play in his sandbox because he doesn't want them to find out that he doesn't know how to play. Is this normal?
OK, first things first; if he's calling people stupid in a serious sense then that's just wrong; part of good management is keeping your employees happy. Happy employees are more likely to do things without being otherwise coerced. Unfortunately quite normal (so I've heard; this isn't a problem where I work) but still not actually right.
The one bit where it gets a bit complicated is where you state; " often doesn't know what he is doing or how to do anything better than the people he is calling retarded."
The trick here is; are you stating he doesn't know how to do HIS job better, or that he doesn't know how the people he's talking to should do THEIR jobs better? If people are screwing up and he's pulling them up on it, but not directly telling them how to solve it, that's not neccessarily wrong; his job isn't to know what everyone below him does in minute detail, it's to make sure YOU know how to do your job, and make sure you're doing it. How what you're supposed to be doing what you're doing isn't something he needs to do, so you SHOULD know your job better than he does.
But yes; overall, normal, but wrong.
If you're really lucky, you might be able to impress HIS boss. , make YOUR boss look bad, snd get his job. But what are the odds of that?
As we say in polynesia 'it is only gay if you take it'...
At a lower level of managment one gets promoted to a supervisory level because one did something well other than manage. You boss may have been excellent at his previous job, and yet still be psychologically unsuitable for a management position.
It is also possible that your boss was promoted to his position because his boss liked him for reasons other than competence at his job. Perhaps they have been friends for years who share many interests.
How do other subordinates of this boss feel about him? You need to gain some sense of their feelings. At the same time you should be careful about expressing contempt for your boss. When you are with a group of people you should suspect that anything you tell one person in the group may be told to anyone or everyone else.
Right now, you should concentrate on doing your job well, and on not being fired. At the same time look for other positions in your company, and look for jobs outside of your company. If your boss is as bad as you say he is, he is likely to be fired or demoted, but it may take time. In the present economy you should try to keep your job if it is at all possible.