Yes, humans are shortsighted and stupid. That's why we need state-sponsored medical care. Run by humans.
Ex: Human memory sucks, but you can generally trust the immutability of books, despite them being written and copied and bound and distributed and sold by humans.
It's all about using strengths in the right direction and order to sidestep weaknesses.
Fortunately their supposition is false. Humans are not generally shortsighted and stupid, if you give them a chance.
“But the average American has less than $4,000 in savings, while 57% of U.S. adults have less than $1,000 to their names.”
https://www.usatoday.com/story/money/personalfinance/budget-...
No, a fallacy of composition would be "the organization is stupid because its employees are stupid", or "metal boats are impossible because metal sinks in water." It involves something which is composed of the smaller pieces.
What you're describing is more like a hasty generalization, where individual-qualities within a sample lead to a conclusion about individual-qualities shared by the entire population.
> I was trying to point out that if their supposition is true then we are all screwed no matter what.
And -- even if their supposition is true -- I disagree!
Metal boats can float on water, even though individual metal pieces sink. Institutions can solve problems, even ones that individuals humans suck at.