Carbs --> Insulin --> Fat --> Inflammation --> Diabetes

The Medical Business (trade name: "Healthcare") says that excess calories makes you fat, and then being fat causes diabetes; the low-carb proponents say that's wrong, it's excess carbs causing insulin spikes which in turn cause insulin resistance (IR), which then leads to both fat gain and diabetes (T2DM). They're both half-right; actually it's: excess carbs --> insulin spike --> fat gain --> inflammation --> insulin resistance --> type 2 diabetes.

The Diabesity Epidemic

As Gary Taubes documented in Good Calories Bad Calories, the science has never supported the claim that eating fat makes you fat. 

Protein usually comes paired with fat in nature; so, by demonizing fat, the Conventional Wisdom restricts protein consumption (they even explicitly state that only 15% of calories should come from pro.) Protein is by far the most satieting macronutrient; each bite of protein you swallow reduces hunger a little bit. This is not the same thing as "feeling full"; indeed, many fat people have had the experience of eating carbohydrate until they feel sick - or even beyond. This is not because the carbs are "high-reward foods", but because carbohydrate does not reduce hunger.

For example, a woman trying to eat healthy - and who believes the CW - has a breakfast consisting of fat-free bagel ("made with whole grains"!), with some jelly on it, and a bottle of fruit juice or a coffee. That meal is 100% carbohydrate; no fat, no protein. How is she supposed to have any will-power when the mid-morning snack cart rolls around? And what's on the snack cart? Fruit, bagels, and donuts: all carb. This person is going to hit lunch time having had no protein to reduce hunger yet that day, but tons of pure carbs to spike her insulin repeatedly. (But her co-workers will see the fat woman say, "I'm starving" and think "She's already eaten too much, look how fat she is!")

The authorities look at this situation - that they have created - and say the cause of obesity is "overeating."

How Carbs Make You Fat

Each time you eat a significant amount of carbs, it causes an insulin spike. This does not cause IR; however, if you do it three meals and two snacks every day (exactly what the CW recommends), it will* make you gain fat over time. Although some LC proponents claim that this insulin spike converts all carbs instantly into fat, they are not correct. What does happen is that your body will burn carbs for all of your energy needs, use only a little bit of fat to make hormones or for other things, store most fat as fat, and convert some of the carbs into fat.

This trains your body to burn carbs and store fat, so that it becomes impossible to eat "low-fat" enough not to get fat.

*true for most people, as I explained here.

Inflammation

Intra-abdominal fat ("belly fat") produces inflammatory cytokines. You need some of these chemicals for your body to function properly, but too much intra-abdominal fat means too much inflammatory cytokines.

So, the fact of being fat directly causes T2DM by constantly bathing the whole body, and especially the pancreas and liver, in the inflammation-causing chemicals. (In those who are genetically predisposed to develop T2D if they get and stay fat; for other people, being fat may cause the development of some other disease state - NAFLD, for example.)

But, But, But . . .

"But what about all the skinny people who develop diabetes?! That totally destroys your BS.", I anticipate someone exclaiming.

No, it doesn't.

First of all, the vast majority of people who develop T2DM were not fat, then got fat, then developed diabetes.

Second, most people who were skinny, then got fat, then developed diabetes, then lost the excess bodyfat - whether through surgery or diet - are cured of diabetes.

Thirdly, although most obese people never develop diabetes, obesity is the # 1 risk factor for T2DM.

And finally, maybe the few people who are skinny and develop T2D are just deficient in chromium?

Of Carbs And Chromium

Before submitting yourself to vivisection (aka "surgery"), maybe you should reject the Medical Business in favor of science; i.e., try a low-carb diet and a chromium supplement (either GTF or picolinate, whichever you prefer).

• all people should be taking 200 mcg chromium per day
• if fat or T2D, add 200 mcg per day (total of 400)
• if fat and diabetic, or obese but not diabetic, add 200 mcg per day (total of 600)
• if obese and diabetic, add 200 mcg per day (total of 800)

This means that if you are obese and diabetic, and you take 800 mcg chromium per day and follow a LCHF diet, and you lose enough fat to be "overweight" but not obese, you drop the chromium to 600; then, if you lose more weight, you drop the chromium to 400; if you then cease to be diabetic, you drop to 200.

[Note: divide those doses! Do not take all at once, but one pill (200 mcg) per meal.]

Omega-3's

Omega 3 fatty acids are anti-inflammatory. "Ohh!", you think, "I'll just pop a handful or two of those each day. Problem solved." Not so fast, buster.

There is a limit to how much omega 3 your body can safely metabolize each day. About one gram each of ALA, EPA, and DHA is about right for most people. (For most Americans, this would require eating some flax and taking a fish oil supplement.) 

The diabetes prevention and/or cure effort should focus mainly on the aforementioned LC diet and chromium as needed.

Update  July 18, 2012

I now realize I may have been unclear about protein (hat tip to Peter and his commenters at Hyperlipid); excess protein can be converted into glucose, which the body will burn instead of stored bodyfat.

So, while some protein will help you say no to the wheat and sugar, mainly replace the carbs with dietary fat. I addressed this more thoroughly in my article How to Sync Diet and Exercise.