I hate it when I have to explain everything in order to make the joke work. I think it was Mark Twain who compared explaining humor to dissecting a frog: you can do it, but it tends to die in the process.
All of these strips ran back in the late 1970s; that's why this strip has a Steve Martin, 'Saturday Night Live' reference as the punch line.
Our yellow-skinned friend is 'The Creeper', created by original Spider-Man artist Steve Ditko (yay!). Let's set the stage: you're a criminal, sneaking through the night, doing the usual sort of criminal-like things you do when you're prowling around in the dark. All of a sudden, you're confronted by this grotesque-looking, nearly naked, yellow-skinned creature with a wild red mane, laughing hysterically as he lunges towards you.
Hopefully, you're wearing your 'Depends' undergarments.
That was his schtick, you see - he'd pretend to be psychotic, and terrorize criminals. Not to be confused with Plastic Man, who would pretend to be, oh, let's say a mailbox, and terrorize criminals. It's a different kind of method acting entirely.
It's kind of interesting to note how many so-called heroes use terrorism or fear to prevail over criminals (okay, 'terrorize' might be too strong word to describe Plastic Man; more like 'surprise the bejeezus out of'). The Creeper with the psychotic behavior, Batman with his creature-of-the-night routine, The Question with his man-without-a-face gimmick (another Ditko creation, by the way), and so many others all relied on menace and the threat of violent behavior. Heck, even Superman wasn't above strong-arming suspects back in the early days. Nothing like confessions obtained under duress to advance the wheels of justice…