I changed `.setup_database` to default to the rails model directory while intentionally leaving the initializer without any defaulting. That seems to provide the most flexibility while still providing a nice user experience. Ie, the most common usage pattern (calling `.setup_database`) gets the reasonable default while still allowing this behavior to be used w/o any defaulting if that is desired. 

If you still feel strongly that the defaulting should be in the initializer rather than the convenience method let me know and i'll move it.