No, wealth was not destroyed during the crisis. It is during the boom that wealth is destroyed.
When you build a house that no one is going to value enough to live in you are destroying wealth. So it is the distorted market signals during the booms that make people allocated wealth to wastefull use that is the destruction. The crisis is just the correction when people start to realise they destroyed capital...
Good view, I think the word "value" seems play a vital role here.
I spent lots of resources to dig out a stone that no one seems like, my labor has just been wasted, this means wealth are destroyed. But if a person with the right knowledge can identify the stone as a diamond, then suddenly I have made a fortune, wealth are created
So, is wealth dependent on others valuation?
In a desert, a man desperately looking for water, how much a bottle of water value to him, compared with the same bottle of water in the city? Can we say that scarcity create wealth and abundance destroy wealth?