Glad you like the rant ;-)
What I was responding to was the statement "If you think there's a glut of contract IT workers now, just wait.", and what I'm saying is that there is no glut. There *never* has been a glut of competent people. The summary basically says, oh no, some baby boomers are going to retire and work less and be contractors, and that if you think that the current glut (that is causing you to not have work) is bad, just you wait, because it is going to get worse to the tune of 10,000 workers retiring (and maybe becoming contractors, gasp) every day. WTF, who cares, be an employee, be a contractor, whatever, get whatever you can make the market pay, and don't whine about it. If you want more, do something about it. With regards to expectation of high wage, damn right, I expect. If someone wants me, they have to pay. If they want cheaper, I'll be happy to recommend some more junior developer. If someone else doesn't expect a high wage or benefits, and that is all they feel they are worth (retired or not), then that is probably what they are worth.
Regarding the tension between full-time employees vs. contract workers, the market will straighten this out. Adam Smith had it right. When I left (level 63), total salary plus benefits was $150k. Now I bill at a rate that is quite a bit higher per hour, even including benefits. Some people will opt for the security of having a blue badge, and consider that it is not worth the effort to be a consultant. I left behind a number of non-vested stock grants, and have since more than made up for that lost ground via higher billing.
Personally, I have a different problem. I *can't afford* to be a full-time employee. There are not many jobs that have a salary at > $200k (see the various salary surveys), and I can't afford to take a pay cut in order to be an employee. If you are going to stay at MS, even though MS pays 'better' than many other companies, it still takes a *huge* effing effort to get to >= $200k + benefits. As an aside, one of my friends (at GM level) has been at MS for maybe 20 years, and is finally at $350k, and when out drinking one night, he said that the amount of pain he went through to get to his level was so not worth it. Being a contractor is just an easier, happier life.