Eligible men and women age 18 to 79 years with early diabetes on diet only or oral monotherapy with baseline HbA1c 7.0-10% and CRP greater than or equal to 2.0 mg/l will be randomized in a 2X2 factorial fashion as follows. First, participants will be assigned at random to open-label Lantus or no insulin. Then, within these two categories, subjects will be assigned at random to metformin or placebo. Thus, the four resultant treatment groups are Lantus injection and placebo pill, Lantus injection and metformin pill, metformin pill alone, and placebo pill alone. All patients will receive diet and exercise counseling.