It's both ways.
As a case in point, one of my little brothers had, some years ago, a 84 Z28 LG4 auto trans. Yerbasic typical stock tractor motor; put one on a chassis dyno, and it makes peak torque the instant the run starts, and decreases constantly from there.
Came with 3.23 gears. The car I had at the time, a 83 Z28 L69/T-5 3.73, could take off from behind his, pull out, pass it, and pull back in in front of it, by the time I shifted to 3rd gear.
He was cruising the junkyard and came across a wrecked HO Z28, and snarfed its rear. 3.73s of course. (I ganked the hydraulic clutch system from the same car and put it in mine... got that stupid Stone Age linkage crap out of it. 2nd best mod I ever did to it, right behind getting rid of the stock shifter, and right in front of LCA relocation brackets.)
It became EXACTLY as I just described: it could SMOKE just about anything off the line if it hooked up, but was almost impossible to drive on the freeway without getting run over. It took about 15 seconds and a quarter tank of gas to get from 60 to 65 mph. Wouldn't even go 70 unless it was down a long steep hill.
That's what happens with "too much gear".
The "not enough gear" problem is pretty severe too, but it's the opposite. That's where the car has NO LEAVE WHATSOEVER, but if you leave it in 1st gear until about 70 mph, it almost seems like it's got some power. That's what hapens with a race setup motor in a stock-geared car.