Yes him to death and then keep going about your business.
When he barks orders laugh, smile, act like he's kidding.
Ask the real boss if this guy is always like this, in an offhanded manner, just to see if they're aware.
Try not to embarrass him in front of others because it'll definately force a confrontation.
Form a coalition with the other newbies to ignore him.
Alternative- Call his bluff in front of everyone then take him out, assuming you don't need him for anything.
There are these "fer me or agin me" assholes everywhere, Slang. It sounds like you've got him pegged pretty well, so much depends on your bullshit tolerance. Good luck.
