The unemployment rate in the city of Los Angeles is 13.7 percent. If you’re jobless in a job-scarce era, there is a classic way to escape your predicament: start your own business. Even if you sell ice cream from a cart or take in sewing, you can make it in America.

But maybe not if you’re in Los Angeles. That was the message from a study released last week from the Institute for Justice. It laid bare a city that discourages small-business startups and chokes its entrepreneurs in red tape so absurd you’d think the rules and regulations were written by Samuel Beckett.

For example, a video that accompanies the report said if you want to start a simple shop that sells used books, “You’ll need a permit from the police to operate. You’ll have to be fingerprinted. Anyone who sells you books may need to be fingerprinted, too. For every book you buy, you’ll have to stamp it with an individualized number that corresponds to the bill of sale that identifies the book and who it came from. Police get to inspect those bills of sale and – hold on – you’ll also have to hold books for at least 30 days before you sell them. Just in case the police have any questions.”

Now, the Institute for Justice is a libertarian public interest law firm, so its viewpoint must be taken into account. Still, the report cites the city’s own rules. And the effects.

Take pushcart vending. It’s illegal in Los Angeles. Well, you can create a special vending district, but the process is so absurdly difficult only two have ever been created (MacArthur Park and San Pedro) and both are defunct. No wonder. The rules dictate that a vendor can’t move from his spot – negating a big advantage for a pushcart. So much for selling ice cream.

The report is jammed with such weird rules for businesses. If you want to start an Internet café (to help some of those unemployed send out resumes, etc.), be prepared. The city dictates everything from the number of computers (no more than one per 20 square feet of floor area), the lighting (at least “1.5 foot-candles surface illumination on a plane 36 inches from the floor”) to the window treatments (no tinting, and any blinds or drapes must be drawn or opened during business hours, except when needed to block sun glare).

But the saddest part of the report deals with home-based businesses. Los Angeles flatly prohibits 37 categories of business from operating out of the home, including ones that provide hair cutting, dog sitting, sewing and other services that have little impact on neighbors. Even if an entrepreneur’s business does not fall within one of the 37 prohibited categories, it still may be doomed because the city’s “home occupation” regulations effectively prohibit many more types of businesses.

This is sad because the city is choking the classic way for unemployed and underemployed Americans to bootstrap themselves. As the report pointed out, Bill Gates and Paul Allen started in a garage, so the next Microsoft apparently would be illegal in Los Angeles.

Of course, folks can ignore the regulations and open a home business anyway, but violations can be punishable by fines and up to six months of imprisonment. In 2008, the report stated, the city issued about 170 orders to comply under the home occupation regulations.

Now, the city claims it is more business-friendly than it used to be. Mayor Antonio Villaraigosa wrote an op-ed in last week’s Business Journal that pointed out the improvements made by the city.

That’s a start, but let’s be honest. The city mostly wants to attract businesses that provide union jobs. The city fundamentally does not understand and does not welcome true small-business bootstrappers. If it did, it would find ways to help them. Instead of making criminals of them.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].