Re: present simple or progressive
I would consider it non-standard. Few thing that don't involve death, mayhem, or financial ruin fall into the category of "major mistakes" for me.
I'd write it as "have."
I'd also hyphenate self-confidence.
I'd also say "how little self-confidence today's teenagers seem to have."
But then it wouldn't be the same sentence, would it.
I'm not a teacher, but I write for a living. Please don't ask me about 2nd conditionals, but I'm a safe bet for what reads well in (American) English.