I lived in northern NJ for a couple of years. You need to get out of that place; it's a terrible place for software engineers. The cost of living is ridiculous but the pay for engineers is mediocre at best. Move to Silicon Valley: the cost of living is only slightly more, but the pay is far higher, and the weather's a lot better too. And $35/hr 1099 is ridiculously low in that area, those are poverty wages.

Anyway, you make it sound like you can't get a job there without a recruiter. There's still plenty of companies hiring directly, I even interviewed at a few when I was there such as Alcatel at Bell Labs and some wifi company in Manhattan. My current gig is with a large company (in the DC area) that hired me directly. Stop wasting time with recruiters and just look for companies that do their own recruiting; there's no shortage out there that I've seen. I've had 8 jobs now that were not contracts and not through recruiters: 3 large corporations, 3 small companies, 1 mid-size, and one a state university research division. Am I apparently special that I'm able to find these jobs?