 RATIONALE: Drugs used in chemotherapy, such as arsenic trioxide and dexamethasone, work in different ways to stop the growth of cancer cells, either by killing the cells or by stopping them from dividing. Thalidomide may stop the growth of multiple myeloma by blocking blood flow to the cancer. Giving arsenic trioxide together with ascorbic acid, dexamethasone, and thalidomide may kill more cancer cells. 