RATIONALE: Drugs used in chemotherapy, such as arsenic trioxide, dexamethasone, and ascorbic acid, work in different ways to stop the growth of cancer cells, either by killing the cells or by stopping them from dividing. Giving more than one drug (combination chemotherapy) may kill more cancer cells. Sometimes when chemotherapy is given, it does not stop the growth of cancer cells. The cancer is said to be resistant to chemotherapy. Giving arsenic trioxide together with chemotherapy may reduce drug resistance and allow the cancer cells to be killed. Thalidomide may stop the growth of multiple myeloma by blocking blood flow to the cancer. Giving arsenic trioxide together with thalidomide, dexamethasone, and ascorbic acid may kill more cancer cells.