What do they mean when they say "He can't find himself way out of paper bag?" Or "Couldn't manage himself out of paper bag?"
Also what is the history of this statement? What is the origin?
We've all watched a kitten emerge from a paper bag, yes? I believe the ease with which such a small animal can accomplish the task highlights the weakness of a person who can't.
Regardless of the particular version in question, it normally applies to weakness and inability to do something fairly routine. Note the difference between this and the variations on:
The phrases in this pattern relate to general stupidity.
My father used to say that someone "couldn't fight his way out of a wet paper bag" as a way to indicate physical smallness and weakness. I only started hearing generalizations of this (act his way, find his way, lie his way etc) in the last 10 or 15 years. The fight version is pretty obvious in meaning and hardly even a metaphor were it not for the fact a person can't fit in a paper bag. The rest are constructions from that one.