I think I may be the dissenting voice here. Sure, demote her - that's the way to go - but only if you are certain you're right. However, what are her reasons for saying you're dumb? Find out why she thinks your decisions were wrong and look at them - really look at them. Maybe they were the wrong thing to do. Discuss it with others who you can trust to be neutral, not 'yes men'.
You're demanding respect for being the owner. Respect is earned. It takes a pretty big person to admit they may have been wrong. Just demoting or banning her without taking into account that she may have a point on some things would make you look petty to the rest of the membership.
I don't know all the facts here - just what I see on this thread. I'm not convinced in either direction as to who is wrong or right. I've got a simple rule for this sort of thing - I won't always accept what you're saying, but I'll always listen. (Well, unless you're a certain member of my work's personnel team who is on many peoples' auto-delete rules...)
Rapscallion
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