Have you ever noticed that some people are so incompetent they don't know how incompetent they are? This, by no means, is a unique or new observation.
In fact, this story 'broke' several years ago and was picked up by all the usual major news sources (there are a zillion citations but here's the New York Times one for reference. In essence, Dr. David A. Dunning of Cornell University concludes that incompetent people lack the basic skills needed to assess themselves properly.

These are not your run-of-the-mill lazy, mediocre, untrained, job-mismatched, or instant expert types. They are not the people who don't do things your way or to your standards. These are folks who truly cannot perform but think they can.

This is not a new phenomenon; this has been going on forever: I imagine Thag rubbing two bananas together in a vain attempt to make fire. His manager, Looga, asks Thag for his self-evaluation. Thag says, "Thag always make good fire" even as his bananas are falling apart.

We've all worked with this person. They are supremely confident in their abilities but wholly incapable of actually doing anything. Some of us have managed these people. And a few of us have been managed by them.

Interviewing Tip: frequently, to hear them tell it, the incompetent person was "instrumental in {this big thing}". Good probative, follow-up questions should be asked that are designed to find out what - exactly - the candidate did and how much was done by other team members while the candidate just happened to be in the same room or on the same planet. The incompetent person will tell you what a great job they did but will not be able to provide actual details (even if they're not incompetent this could be an indication of credit stealing or job-inflation).

As a manager, one huge clue that you have a Thag is if your assessment of someone is wildly different than that person's self assessment; incompetent people tend to give themselves very high marks for everything. Also, pay attention to the other members of your team and listen to them. Very few people enjoy ratting out someone. Anything that sounds like an observation of Thagism should pique your interest.

I recall overhearing one of my normally very patient and sedate team members say with real agitation, "Thag (not their real name), I've already told you how to do that THREE TIMES!" It was then that I knew I had a serious Thag issue.

Some people can be remediated but it's a tough road and, more than likely, it won't pan out (again, I'm talking about real incompetence not just people who aren't as sharp as you want, who may be in the wrong job, who do things "the wrong way", etc.) Ask an incompetent person how their training is going and you'll hear: "oh, it's going great!" Rinse, repeat ...

If you are managed by a Thag you have a great opportunity to manage yourself. Or, you may be doomed and it's time to move on. If your Thag manager readily and reliably takes cues from you, you may be able provide them the guidance they need to leave you alone. This arrangement may be problematic, though, come review time. An incompetent manager will not really know how to rate you. If your company does "rankings" (rating people across departments), your manager may not have the wherewithal to protect his people.

Managing your problem boss is a major theme of this site; please return and look for additional information on this and other related issues.