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The plot of A Confederacy of Dunces is a knotted, tangled, ridiculous thing. Following it is like unraveling a giant ball of yarn wrapped around a very fat man with a moustache and a funny hat who keeps falling over. So have patience… and watch out for toppling medievalists.
Ignatius Reilly, an extremely large, slothful, and cranky fellow wearing a hat with flaps over his ears, is waiting outside the D.H. Holmes department store for his mother. A policeman, Officer Angelo Mancuso, threatens to arrest him as a suspicious character. A scene ensues, in which Mrs. Reilly arrives, the crowd turns on Mancuso, and Claude Robichaux, an old man, is arrested. Mancuso's sergeant tells him he is an idiot and orders him to dress up in ridiculous costumes and wander around the city until he catches an actual perpetrator.
Meanwhile, Ignatius and his mother escape into a strip club/bar called the Night of Joy, where they chat with the stripper Darlene and are abused by the proprietor, Lana Lee. Mrs. Reilly drinks too much, and as a result, she crashes her car into a building. A sheepish Officer Mancuso finds the wreck and helps Mrs. Reilly dig out.
The building owner agrees to let Mrs. Reilly pay back the damages in installments. In order to make the payments, Mrs. Reilly—encouraged by her new friend, Officer Mancuso's aunt Santa—tells Ignatius he has to get a job. He is outraged at the very suggestion.
But eventually his mother browbeats him out the door and into the mean streets. Almost despite himself, he gets a job filing at Levy Pants. Instead of filing, though, he causes trouble. He writes an extremely abusive letter to a retailer under the signature of Mr. Levy, the owner of the company, and then he decides he will impress his ex-girlfriend, hippie Jewish leftist Myrna Minkoff, who is now living in New York.
How will he impress her? With gifts? Flowers? By remaining gainfully employed? No, he decides to impress her by leading the black factory workers in revolt against office manager Mr. Gonzalez. The factory workers are at first amused, but then bored and irritated; they abandon Ignatius, who is fired.
Meanwhile, Officer Mancuso is wearing funny beards and Santa Claus suits and wandering around town forlornly seeking perpetrators to harass. He ends up on a long stake out in a bus station bathroom, where he gets a terrible cold. Ignatius lends him his favorite book, Boethius's Consolations of Philosophy. This just depresses Mancuso, especially when a kid named Gus steals it.
Meanwhile meanwhile, Burma Jones gets a job sweeping floors at the Night of Joy. Jones is black, and without a job he is subject to arrest at any moment. In desperation he agrees to work for virtually nothing, but resentful of his low pay, Jones decides to sabotage owner Lana Lee any way he can. He discovers that she is involved in some sort of shady business passing suspicious packages to that book-stealing kid Gus. Jones secretly writes the address of the Night of Joy on the packages in the hope that this will get Lana Lee in trouble.
Meanwhile meanwhile meanwhile, Ignatius gets a job selling hot dogs. He gains weight because he eats most of the hot dogs; he also wears a pirate costume, for reasons that are unclear. That sneaky kid Gus pays Ignatius to store the packages from the Night of Joy in his cart.
Ignatius looks inside them and discovers a nude picture of Lana Lee reading Boethius's Consolations of Philosophy (which Gus gave her as a prop). Unable to see Lana Lee's face, Ignatius does not recognize her, and assumes that any naked woman reading Boethius and performing unspeakable acts with a piece of chalk must be cultured and refined. He sees the address on the outside of the package, and determines to go find her.
Ignatius appears at the Night of Joy during Darlene's big debut performance—she is doing a striptease with a parrot—and realizes that he has been misled, and there is no cultured damsel in distress in the offing. He makes a scene, and the parrot attacks him, grabbing his pirate earring.
Ignatius staggers out and is almost hit by a bus. Officer Mancuso appears on the scene undercover and Lana Lee, thinking he's a likely mark, propositions him for sex and shows him the picture of herself naked. Mancuso arrests her, and Burma Jones shows him the stash of the rest of the pornography. Mancuso's sergeant promotes him, and in return for helping the police, Jones will maybe not be arrested every time he walks down the street any more.
Ignatius recovers from the parrot attack, but is accosted in his home by Mr. Levy, who demands to know whether Ignatius wrote the abusive letter to the retailer; the retailer is now threatening to sue Mr. Levy for pain and suffering. Ignatius denies his involvement, saying the letter was written by the elderly Miss Trixie.
Mr. Levy's wife has taken Miss Trixie under her wing as a kind of pet project, and Mr. Levy and his wife cordially hate each other. By blaming the letter on Miss Trixie, Mr. Levy makes it look like it's all Mr. Levy's wife's fault, decisively winning their long-running battle for domestic supremacy. Mr. Levy, for his part, decides to change the Levy Pants company to the Levy Shorts company. He also decides to give a prize for good citizenship to Burma Jones in the hopes of improving the morale of his mostly black employees.
Thus Ignatius is off the hook. But Mrs. Reilly has finally had enough of his escapades. She decides to marry Claude Robichaux, who has been courting her, and get Ignatius committed to an asylum. But Myrna Minkoff shows up in the nick of time, and Ignatius convinces her to take him with her back to New York. The two drive away just as the Charity Hospital ambulance pulls up, leaving New Orleans and all the tangled strands of plot unwound behind them.